5 Chapter 1 Introduction 1.1. Background Vehicles has become a very major needs especially in Indonesia. More than 750 thousand of new passenger cars were registered in 2022 (Statista, 2023). Car production itself also has a stunning record of approximately 1.4 million units which has a stunning 31% growth. It is also has been proven that automotive industry are one of the pillars for Indonesian economic growth (Gaikindo, 2019). The transition to electric automobiles has been pushed by government regulations all over the world in an effort to reduce emissions of carbon dioxide (CO2). The reduction of carbon dioxide emissions is one of the goals that Indonesia has set for itself. One of the attempt to reach the goal is to boost the usage of electric vehicles (EVs), despite the fact that there are significant obstacles in the areas of infrastructure, technological advancement, cost, and acceptance among users. Automotive industry has become more interesting for car manufacturers since the government of Indonesia are also slowly supporting them with infrastructure development such as toll roads and bridge construction. (Mahinda arkysasa, 2023). The electric vehicle (EV) is recognised as a critical technology for the future of automotive power in the automotive industry's roadmaps. electric vehicle has become a main focus for major global automakers, and it is projected to alter the road transport industry. 1.2. Problem Statement Electric cars (EVs) are gaining popularity quickly because of growing environmental concerns, technological developments, and government regulations that are supportive of them. This is causing a fundamental change in the worldwide automobile industry. For the market for conventional cars, however, the growing popularity of EVs offers both considerable potential and challenges. Conventional automakers have to navigate the competitive landscape that encompasses both new and existing businesses in the EV market while also adapting to shifting consumer needs, technology advancements, and 6 regulatory challenges. In addition, the growing popularity of EVs poses significant queries regarding the future of conventional vehicles in Indonesia, particularly with regard to market share, pricing policies, and customer behaviour. By analyzing market trends, consumer preferences, and industry responses, this research seeks to provide valuable insights into how the rise of EVs is influencing the conventional car market in Indonesia. The study will also examine potential future scenarios for the automobile industry, offering strategic recommendations for stakeholders to navigate this transitional period.