Indonesia’s Resources Are A Great Incentive For Local EV Manufacture

Indonesia says it will start producing electric vehicles in 2022 following investments in the country from a number of companies, Reuters reports.

Car manufacturers including Toyota and Hyundai have expressed interest in building electric vehicle plants in the Southeast Asian country. Indonesia’s Industry Ministry is pushing for the development of electric vehicle and battery production facilities to create a downstream industry that will make good use of the nation’s huge supplies of nickel laterite ore used in the creation of lithium-ion batteries.

According to director general of metal, machinery, transportation and electronics at the Indonesian Industry Ministry, Minister Harjanto, the government wants electric vehicles to reach a 20 per cent share of national car production by the year 2025.

Also Read: Hyundai To Build A New Plant For EVs In Indonesia As Part Of $880 Million Investment

In a bid to encourage car manufacturers to start building EVs locally, the Indonesian government is finalizing the revision of a luxury car tax scheme which will reward automakers for building vehicles with low carbon emissions.

“Recently there were a few battery companies which met the (industry) minister, but it is still an initial intention,” Minister Harjanto said. “They see Indonesia has big potential to develop electric-based products due to the availability of raw material.”

Toyota has already committed to invest $2 billion in Indonesia over the next five years, part of which will be funneled towards the local production of electric vehicles. Hyundai will invest $2.8 billion in Indonesia and hopes to begin manufacturing vehicles locally in 2021 with SUVs, hatchbacks, sedans, and then electric vehicles.