Indonesia Aims to Produce 600,000 Electric Cars

Heru Andriyanto, Herman
July 14, 2021 | 9:35 pm
SHARE
President Joko Widodo writes his signature on the hood of a Kona electric car during his visit to Hyundai car factory in Ulsan, South Korea, on November 26, 2019. (Photo Presidential Secretariat/Laily Rachev)
President Joko Widodo writes his signature on the hood of a Kona electric car during his visit to Hyundai car factory in Ulsan, South Korea, on November 26, 2019. (Photo Presidential Secretariat/Laily Rachev)

Jakarta. The Indonesian government seeks to become electric vehicle production hub in the region, aiming for an output of 600,000 electric cars and 2.5 million electric motorcycles by 2030, an official said on Wednesday.

The country also is preparing an ambitious plan to become a key player in the global supply chain of lithium-ion battery in line with the EV industry.

“Battery is the most valuable component inside an EV, it accounts for 35 percent of production costs,” Industry Minister Agus Gumiwang Kartasasmita said in Investor Daily Summit, a major investment forum that brings together top government officials and business executives from various sectors.

“Indonesia’s key advantage in EV industry is nickel-based lithium-ion battery because we have world’s biggest nickel reserves,” Agus told the virtual gathering hosted by leading business newspaper Investor Daily.

Advertisement

The government has issued the so-called EV Roadmap detailing various incentives to attract more investment in the rapidly growing EV industry. According to the roadmap, EV sales are exempt from luxury tax and import duties, while consumers also enjoy low-interest installments. 

In addition, EV owners are entitled to upgraded home electricity capacity with discounted fees, Agus said.

The incentives involve inter-agency works from, among others, the central bank, state-run electricity company PLN, the Finance Ministry, the National Police and the Industry Ministry.

Agus claimed there are nine companies in Indonesia ready to support the battery industry -- from raw material suppliers to final product manufacturers. 

One of the battery makers is Industri Baterai Indonesia (IBI), whose president told the webinar that mass production will start in 2025.

“One factory will become operational in 2022 to produce 10 gigawatt hours of battery,” Toto Nugroho said.

IBI is a consortium of four state-run mining and energy companies, including Pertamina, Antam, PLN and Mining Industry Indonesia.

Hyundai
South Korean automaker Hyundai is the first company to announce a plan for EV production in Indonesia, having already set up a $1.5 billion factory in the West Java town of Cikarang.

The company even said its first EV made in Indonesia will roll out as soon as March next year.

The factory is currently developing two models of conventional gasoline cars, those with internal combustion engine (ICE).

“For next year, we plan to launch two ICE models and an EV model. Around March 2022, we will launch completely-knocked-down EV in Indonesia,” Lee Kang Hyun, chief operating cfficer of Hyundai Motor Asia Pacific, told the webinar.

The West Java factory has a capacity of up to 200,000 units a year, according to Hyundai.

Lee said global EV sales will increase dramatically from 2 million units last year to 30 million by the next decade. 

While Japanese automotive giants appear to be less enthusiastic in EV development, they have pledged new investments in hybrid car production in Indonesia.

Minister Agus said during a meeting with Japanese automakers in March, Toyota pledged to add investment by Rp 28.3 trillion, Honda promised Rp 5.2 trillion, Suzuki agreed Rp 1.2 trillion and Mitsubishi vowed Rp 11.2 trillion until 2024.
 

Tags: Keywords:
SHARE

Related Articles


Tech May 14, 2025 | 3:20 pm

Smoke, Not Fire: BYD Responds to Electric Car Incident in West Jakarta

A BYD Seal EV allegedly emitted smoke while parked in a Jakarta garage, raising safety concerns.
Business May 12, 2025 | 12:50 pm

Indonesia Says Local Content Reforms Are Domestic-Driven, Not Response to US Tariffs

The USTR has cited Indonesia’s local content regulations as a trade barrier that prompted the reciprocal tariffs.
Business Jan 21, 2025 | 11:34 pm

Polytron to Enter Electric Car Market with Foreign Partner

Polytron also plans to release new electric scooter models, building on the success of its current offerings, such as the Fox S and Fox 500.
Business Jan 8, 2025 | 11:48 pm

Government Encourages Chinese Carmaker Chery to Establish Factory in Indonesia

Chery has been assembling vehicles in Indonesia since 2022, utilizing a facility owned by local company Handal Indonesia Motor.
Business Jan 7, 2025 | 9:52 pm

Apple to Set Up AirTag Factory in Batam by Early 2026

Apple's upcoming AirTag facility in Batam is part of the $1 billion investment deal that the company has proposed.
Business Jan 7, 2025 | 6:35 pm

Apple Exec Has ‘Great Discussion’ with Indonesia Amid iPhone 16 Ban

Apple executive Nick Amman recently spoke with the Indonesian Industry Ministry on the company's investment plans.
Business Dec 23, 2024 | 7:06 pm

What Merger Between Nissan and Honda Means for Automakers and The Industry

Even after a merger, Toyota would remain the leading Japanese automaker.
Business Dec 21, 2024 | 8:47 pm

Vietnam's Xanh SM Launches Electric Taxi Service in Jakarta, Eyes Bali Expansion

Vietnamese electric taxi service Xanh SM officially launched operations in Jakarta

The Latest


News 1 hours ago

Air India Crash Death Toll Rises to 270

Air India crash death toll climbs to 270 as search teams recover more bodies; investigators analyze black box for crash clues.
News 1 hours ago

Australian Man Killed, Another Injured in Bali Villa Shooting

An Australian man was killed and another wounded after a gunman broke into their villa in Bali's Badung regency early Saturday morning.
News 3 hours ago

Slovak Hiker Injured on Mount Agung Rescued by SAR Team

Slovak hiker injured on Mount Agung rescued by SAR team after slipping at 2,600m. She sustained minor injuries but is in stable condition.
News 4 hours ago

KPK Considers Forced Summons for Singaporean Jet Tycoon in Papua Graft Probe

KPK may forcibly summon Singaporean tycoon Gibrael Isaak after he skipped questioning in a Rp 1.2t Papua graft case linked to a private jet.
Business 5 hours ago

Qatar’s Barzan Doubts ‘Big Market’ Indonesia Will Put Brake on Its Defense Investment

According to Barzan Holdings, Indonesia's defense investment will remain unaffected by economic hurdles.
COPYRIGHT © 2025 JAKARTA GLOBE. ALL RIGHTS RESERVED