Indonesia Attracts $15 Trillion in EV Investment as Factory Construction Accelerates
Jakarta, Indonesia – A surge of investment is fueling the development of Indonesia’s electric vehicle (EV) industry, with six companies poised to inject Rp 15 trillion (approximately $960 million USD) into the sector, according to the Ministry of Industry. The investments will significantly boost production capacity,adding 305,000 units annually,and solidify Indonesia’s position as a key player in the burgeoning Southeast Asian EV market.The Ministry’s latest update, delivered by Director of Maritime Industry, Transportation Equipment, and Defense equipment (Ilamatap) Mahardi Tunggul Wicaksono, details the progress of companies participating in Indonesia’s imported electric car incentive program. The program aims to encourage EV adoption and local manufacturing.
“Two companies are in collaboration with Assembler Local, PT Geely Motor Indonesia and PT Era Industri Automotive,” Wicaksono stated at the Ministry of Industry Office. “Two companies are expanding production capacity, PT National Assemblers and PT Inchcape Indomobil Energi Baru, and two companies are building new factories, PT byd Auto Indonesia and PT Vinfast Automobile Indonesia.”
Leading the Charge: BYD and VinFast
BYD Auto Indonesia is spearheading the investment with a Rp 11.2 trillion (approximately $720 million USD) commitment to build a new factory in Subang, west Java. The facility, planned for a production capacity of 150,000 units per year, is currently 45% complete and slated for completion in may 2025.
VinFast is also making significant strides, with its own factory in Subang, West Java, reaching 77% completion. The Vietnamese automaker is investing Rp 3.5 trillion (approximately $224 million USD) in the project, aiming for an annual production capacity of 50,000 units.
Collaboration and Expansion Drive Growth
Beyond the new factory construction, several manufacturers are leveraging existing infrastructure through partnerships:
PT Geely Motor Indonesia is collaborating with local assemblers for Geely vehicles.
PT Era Industri Automotive is partnering for the assembly of Xpeng EVs.
* PT National Assemblers will handle assembly for Citroen, Aion, Maxus, and Volkswagen.
The incentive program also includes Citroen,Aion,Maxus,VW,BYD,Geely,Vinfast,Xpeng,and Great Wall motors (GWM).
Indonesia’s EV ambitions: A regional Hub
Indonesia’s push for EV development is part of a broader strategy to become a regional hub for EV manufacturing and battery production. The country possesses abundant reserves of nickel, a crucial component in EV batteries, giving it a competitive advantage. The goverment has offered a range of incentives, including tax breaks and subsidies, to attract foreign investment and stimulate domestic demand.
This latest wave of investment underscores the growing confidence in Indonesia’s EV market and its potential to become a major force in the global automotive industry. The increased production capacity will not only cater to the growing domestic demand but also position Indonesia as an export base for EVs in the Southeast Asian region and beyond.
(Riar/din)
Note: Currency conversions were approximate as of November 21, 2023, using a rate of 1 USD = 15,600 IDR.
