Jakarta. Chinese automaker BYD will begin its local production of its electric cars in Indonesia starting in 2026, according to Investment Minister Rosan Roeslani.

BYD, which made its Indonesia debut last year, is setting up a production plant in Subang, West Java. The company has purchased 126-hectare land in the Subang Smartpolitan industrial estate, in a deal with the publicly-listed construction firm Surya Semesta Internusa. BYD started with 108 hectares of land but had just bought an additional 18 hectares in the last quarter.

Speaking to reporters after updating President Prabowo Subianto on Indonesia’s foreign investors, Rosan said that some Chinese investment plans, including that coming from BYD, are in the pipeline.

“BYD has purchased land in Subang. We hope their manufacturing process to start early next year,” Rosan told reporters at the State Palace in Jakarta on Thursday.

Rosan did not say how much BYD had actually invested in its local manufacturing.

When BYD officially entered the Indonesian market early last year, Chief Economic Affairs Minister Airlangga Hartarto said that the Chinese auto giant would invest $1.3 billion in a local assembly plant. Fast forward to October 2024, the Industry Ministry revealed that BYD’s investment plans were worth Rp 11.7 trillion ($721.3 million). Despite the differences in numbers, both ministries said that the annual production capacity of this facility would stand at 150,000 units.

Indonesia is trying to encourage the nationwide move to EVs to cut carbon emissions. Rosan’s latest BYD updates also came not long after the news of Chinese automaker Xpeng planning to penetrate into Southeast Asia’s biggest economy.

The Indonesian Automotive Industry Association (Gaikindo) data shows that wholesales of battery electric vehicles amounted to 23,045 units in January-August 2024. The figures encompass the units sold by the factories to the respective dealers. BYD Seal became the third-most-popular electric car among Indonesians, selling about 3,240 units over the said period. In total, BYD was able to sell a total of 6,461 electric cars in Indonesia last year as of August. 

China ranked third among Indonesia's top sources of foreign direct investments (FDI). Chinese investment in Indonesia amounted to around $5.8 billion in the first 9 months of 2024.