Indonesia-based Kargo Technologies has adopted electric vehicles (EVs) for its freight logistics fleet, launching an EV trucking partnership programme with select clients.

The company plans to deploy more than 500 EVs this year and 2,500 vehicles by 2026, with the objective of fully electrifying its operations by 2035.

CEO and co-founder Tiger Fang stated that the company has begun testing its EV trucks in Indonesia, with pilot plans in Malaysia scheduled to roll out by the end of 2025.

Similar programmes in Singapore and Thailand are expected to follow in 2026.

Shopee's logistics arm SPX, quick commerce firm Astro, and AirAsia's delivery unit Teleport are among the initial clients to use Kargo's EV fleets.

The company, which operates a network of 40,000 trucks and serves more than 200 enterprise clients, is transitioning to EVs to achieve operational efficiencies, meet decarbonisation objectives, and explore the potential of autonomous driving.

"EV cars and EV trucks involve different technology," Fang said. "Electricity is cheaper than fuel, and maintenance costs are lower due to fewer moving parts."

To secure EV supply, Kargo has signed memoranda of understanding with EV manufacturers including Foton, JAC, Wuling, and VKTR. The company is also working with global financiers such as HSBC and local partners including Indomobil Finance and Chailease to develop structured EV fleet financing.

Expansion to Middle East

Kargo expanded beyond Indonesia in 2024 through the acquisition of TheLorry, establishing a presence in Malaysia, Singapore, and Thailand. The company also began operations in China this year through a partnership with AirAsia.

Following visits to Riyadh, Dubai, and Doha, Kargo is evaluating expansion into the Middle East. The company aims to establish an "Electrified Silk Road," a logistics network powered by AI, projected to connect Southeast Asia with China, the Gulf, and the Global South.

"Expanding into the Middle East is a complex process, requiring identification of suitable partners," Fang noted.

He further added that Indonesia provides conditions favourable for EV batteries due to its moderate climate, whereas the Middle East requires batteries capable of withstanding summer temperatures of up to 60 degrees Celsius.

"Research and development are required to support this expansion," Fang said.

He also noted the economic ties between Indonesia and the Middle East. Indonesia imports significant volumes of oil from the Gulf, and the 2023 Comprehensive Economic Partnership Agreement between Indonesia and the United Arab Emirates reduces or eliminates tariffs on traded goods.

Regarding financial performance, Fang reported that Kargo achieved adjusted EBITDA profitability in the first quarter of 2025 and expects to reach net income profitability shortly.

The company's run-rate revenue grew approximately 50% year on year, despite disruptions caused by nationwide protests in Indonesia in the third quarter. International expansion was identified as a key factor in profitability, with 15% of Kargo's workforce now based outside Indonesia.

Kargo last raised funding in July 2024 through an undisclosed round, bringing total disclosed funding to US$ 38.6 million.