ION Mobility's Confidence in the EV Market with Completely Self-Developed Products

The growth of electric vehicles in Indonesia is increasingly felt along with product penetration in society. Compared to conventional vehicles, the electric vehicle industry is becoming more attractive, because Indonesia is not only flashy as a market, but innovations are starting to emerge from local innovators -- both in terms of vehicle products and supporting infrastructure.

ION Mobility is a startup that focuses on developing electric motorbike products/electric two-wheel vehicles (E2w) in Indonesia. They started building a team in Jakarta at that time lockdown pandemic in 2020, led by James Chan as founder and CEO. Products and business models that are considered solid carry them closed $6,8 million in seed funding in two rounds in 2021 and 2022. Followed by series A funding worth $18,7 million in February 2023 led by TVS Motor.

"We are the only E2w player (electric two-wheel vehicles) which is supported by the Southeast Asian automotive industry. "In addition to automotive leader 2W TVS Motor, we also have support from Martin Hartono from GDP Venture and Michael Sampoerna from Sampoerna Strategic as our investors," said James.

James also explained that most of the investment funds collected were used for team development, operations and increasing presence in Indonesia. Currently most of the team is in Jakarta and Bandung, although ION Mobility also has offices in Singapore, Vietnam and China.

“Currently, we operate from a showroom small at Motovillage Kemang while getting ready to launch experience center Our flagship is located in Radio Dalam with 4 floors and an area of ​​15.000m². "Our team is also working hard to perfect our battery pack and E2w assembly line in East Karawang, to keep us on schedule in fulfilling orders in the coming months," he added.

ION Mobility's first product

ION Mobility first exhibited its first product ION M1-S at IMOS 2022, at that time the pandemic conditions began to subside and lockdown reopened. For James and the team, this is an important starting point to start validating the product in the Jakarta market.

Attempt to find product-market fit continues to be carried out by bringing the M1-S to various exhibitions, including most recently to IIMS 2023 and GIIAS 2023. One of the aims is to provide a clearer picture while listening to impressions from potential customers.

"After completing a series of exhibitions over the past year, the ION M1-S will not appear at other motorbike exhibitions until we send it to our early order customers later this year," added James.

ION M1-S is an automotive standard product supported by extensive hardware, firmware, and independently developed software. The size is equivalent to a 155cc motorbike in general, but offers the power and performance of a 250cc motorbike from 0-60 km/h with the support of a number of developed unit features.

"We are still waiting for the local content document (TKDN), but hope to be the industry leader with a score of at least 70%; much higher than all other electric motorbike brands in Indonesia - this can only be achieved because we do not rely on large consultants and do not never contracted out part of the design and engineering of the M1-S to a third party," explained James.

It is also acknowledged that it was not an easy matter to align a team of 50 people (with 10 nationalities in 4 countries) to reach this point. TVS, which has 45 years of experience in the industry, also expressed this.

"Our extreme dedication to 'do it all yourself, alone', along with fewer but better brand and product marketing efforts, is the clearest path for us to create the best electric motorcycles and energy storage products for our customers in Indonesia, James said.

He continued, "Some people said we should have made the M1-S cheaper and stated that the prices of IDR 49 million (72V50Ah variant) and IDR 56 million (72V60Ah variant) were still too difficult to afford for most Indonesians. I told them that there was one obstacle universal we are dealing with; you can only choose 2 of 3 factors: faster, cheaper and better. At ION, we chose faster and better as the 2 priority factors, with price reductions to come as we achieve economies of scale higher, in line with greater demand (and recognition) for our products," explained James.

ION Mobility market niche

It cannot be denied that with the selling price mentioned by James above, ION M1-S to be (significantly) more expensive than the conventional consumer motorbikes that currently dominate the market. For James, the ION M1-S is designed to be a pioneer in its own product segment, namely an electric motorbike with the price of a 155cc motorbike, but with 250cc power (a 5kW electric motorbike that reaches output power 12,5kW).

He also revealed that in Indonesia the average sales of Internal Combustion Engine (ICE) motorbikes per year reaches 6 million - 6,5 million units. The 155cc segment represents around 16-18% of new sales or the equivalent of 1 million+ units with 80% purchased by customers in tier-1 cities such as Jakarta. This user group is still a mass article segment (although specifically included in premium mass) which has more detailed preferences and expectations. So it is also known as a trend-setting customer segment that other mass markets look forward to. This niche is also expected to be touched by the ION M1-S product.

"Designing the M1-S with all its style and substance to match the motorcycle's form factor step-through (flat-bed) a volumetrically limited 155cc equivalent means there is less volume (compared to a motorbike step-over) to accommodate more batteries to produce the high horsepower it has. That's why we had to build everything ourselves. "As a team, we believe in facing the toughest challenges first, and if we successfully navigate this process, it becomes much easier for us to grow as we enter other segments in the future," said James.

Batteries are also a component that receives important attention in ION Mobility innovation. The company designs, engineers and designs motorbike battery packs independently using industrial standard equipment and raw materials from China. The design and assembly process is carried out in the factory that the company established in the East Karawang area.

The ION battery pack is protected by rugged aluminum for heat management and physical protection, using NCM cylindrical cells with a 21700 form factor in a 72V system. They have also obtained international certification for battery packs (UN R136, UN 38.3) and have thoroughly tested the cells, assembly process and packs. ION Mobility is committed to continuing this rigorous  approach to maintain quality throughout batch production.

"Our approach is different from almost every other player who procures their E2w battery packs without the capability or awareness of design and component selection tradeoffs. In other words, they can only blame the supplier  when things go wrong, but at ION, we take responsibility for ensuring results ", and have the internal capabilities to continually improve our own battery pack and management system technology. That's why we're confident in providing a 5-year battery pack warranty to our M1-S customers," explained James.

ION Mobility's main challenges

Indeed, conventional motorbikes are and are thought to continue to dominate the Indonesian market in the next few years. James also agrees with this, but he sees that the electrification of two-wheeled vehicles will be a future that various parties continue to strive for. So that both conventional and motorbike ecosystems development of electric motors will run side by side for the next 10-20 years.

"Did you know that even with coal-fired electricity, the M1-S has a 2,8x to 3,75x lower carbon footprint than a conventional 155cc motorbike? As our earth continues to heat up and sea levels rise as Jakarta rapidly sinks, the push for a full transition to E2w is growing," said James.

The most difficult obstacle faced by ION Mobility is its position as a young and very new brand. This has implications for the level of market confidence. Moreover, the Indonesian market in the last few years has continued to be bombarded with many cheap electric bicycle products which are actually no match for motorbikes in terms of reliability, in fact they are still far from even 125cc engines.

"We have to work against this gradient and ensure that we don't rush into product at all costs, as some other Indonesian E2w brands have done, which would then disappoint their early supporters," continued James.

The next challenge is to ensure people believe that James and the team can realize their vision and mission at ION Mobility. There was doubt, because James doesn't even have a motorbike license in Singapore. He also admitted that he had never built a company in the field hardware which in fact requires large capital expenditure and a mature strategy in order to reach industrial scale. Moreover, in Southeast Asia the ecosystem is still minimal, both in terms of investors and labor supply.

"For an entrepreneur, especially one working in the field of 'hard technology', we face impossible obstacles every day. In my opinion, our task in 2024 is much easier, namely consistently gaining and maintaining the trust of every Indonesian motorcyclist, starting from Jakarta ," he said.

In 2024, ION Mobility will start milestone size, namely by starting to monetize. Apart from that process fundraising Efforts are also being made to raise a series B round to support the growth and strengthening of the team.

"This year is going to be a big year. We will finally go from zero revenue to millions (of dollars), maybe even tens of millions in revenue. We are starting to talk to some investors for series B funding to support our growth trajectory and talent attraction and retention efforts. "My team told me that our E2w Indonesia 'competitors' were desperately trying to recruit them to no avail; we must be doing something right for our E2w colleagues to try to pry them away from us," he said.

Apart from that, ION Mobility will start opening several stores and announce its after-sales service network.

Strategic partnership

The electric vehicle ecosystem is starting to develop, but it still needs to be strengthened, one of which is through collaboration between stakeholders in the industry. ION Mobility itself has been quite aggressive in building partnerships with a number of parties, including the Ministry of Industry in Indonesia, a number of state-owned companies (for example PLN), and financing institutions that can support the company's efforts to produce quality local products end-to-end.

In Singapore, ION has also established partnerships with the local government's investment arm, including a number of innovation agencies such as EnterprisSG, A*STAR and JTC.

The M1-S itself has completed government testing and received road vehicle homologation documents in November 2023. ION Mobility is also in the process of completing several additional documents that will follow, but James is fully confident that the ION M1-S will also qualify for the Indonesian government subsidy program with local content level of 70% or more. The government is currently providing special subsidies in the form of direct price cuts to support the conversion program to electric vehicles. A number of electric vehicle brands such as Polytron, Ointment, Volta, and several others have started running this program.

"It's interesting to note that customers who placed orders in the past year never focused on the subsidy, which is actually just a value add. Even without the subsidy, the M1-S offers equivalent or even better total cost of ownership after 2 to 3 years of daily use, compared to on a 155cc ICE motorbike," said James.

So why will it only be sent to customers at the end of this year? In November 2022, when ION Mobility first introduced the M1-S at IMOS, they estimated a shipping start date of late December 2023. However, after listening to customer feedback, they decided to take action in several areas to further improve the M1-S, which includes:

• Weight reduction – The M1-S is now 14kg lighter at 149kg empty, easier to maneuver and more stable than before with an improved center of gravity.
• Improved vehicle dynamics – tuned for driving pleasure, with improved handling and ergonomics at a wide range of speeds, maneuvers and road conditions.
• Seat height reduction – seat height is now down to 765mm from the ground, allowing users to ride with more confidence and comfort.
• Rear updates – redesigned rear bumper and headlights for a more athletic design.
• Improved integrated charger and waterproof cover – charge M1-S without worrying about rain seeping into the storage compartment through the charging cable.
• Adjustable charging VA rate – users can control how much power the M1-S draws (from 450 to 2200 VA) while charging.
• Integrated TPMS – all riders can rejoice that their M1-S will be equipped with TPMS (tire pressure monitoring system) for both wheels.
• Steering lock – the driver can activate the physical steering lock when parked to prevent unauthorized movement of the M1-S.
• Further testing – successfully achieved increasingly extreme levels of long-term testing, including on the hillside of Mount Tangkuban Parahu with uptime over 99% and riders weighing up to 145kg, with planned test distance milestones of 25.000km scheduled to be completed in the next few months, and 50.000km and beyond by the end of the year.

"I believe everyone in the E2w industry should view this journey as a marathon not a sprint. I think it's a bad idea for any company to grow too quickly. As a former employee in the Singapore government who worked in industrial development, then became venture capitalist early stage technology and angel investors before it became a series techpreneur", I always emphasize to the team the importance of 'venture-capital efficiency' when in the pre-revenue phase," stressed James.