Indonesia fast becoming China EV maker magnet
Published on: Saturday, December 23, 2023
By: Bernama
A electric car from DFSK (Dongfeng Sokon) is displayed at the Indonesia International Motor Show in Jakarta. (AFP)
JAKARTA: Four Chinese electric vehicle (EV) manufacturers have expressed their readiness to start production in Indonesia, an official from the Coordinating Ministry for Maritime Affairs and Investment informed on Thursday.
The ministry’s deputy for infrastructure and transportation coordination, Rachmat Kaimuddin, said that he met with the four manufacturers in China.
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“In principle, they appreciated our policy on EVs,” he added.
However, he did not provide further details regarding the four manufacturers, only disclosing the name of one of them.
“Of the four manufacturers, one has started the project, namely Wuling. They have just launched a new product. While the other three, I am not in a position to talk (about),” Kaimuddin said.
According to him, the four EV producers have also expressed their readiness to follow the regulations in Indonesia, including complying with the 40-per cent domestic component level (TKDN) rule.
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He said that the four EV manufacturers will help Indonesia achieve its target of producing 600 thousand electric cars by 2030, as targetted by President Joko Widodo (Jokowi), reported Antara.
“I have conveyed the President’s target to achieve a production of 600 thousand electric cars by 2030. We welcome them to bring the products,” Kaimuddin added.
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The direction is in line with Presidential Regulation Number 79 of 2023 concerning Amendments to Presidential Regulation Number 55 of 2019 concerning the Acceleration of the Battery Electric Vehicle Programme for Road Transportation.
It also regulates tax-free incentives for EV manufacturers to import completely built-up (CBU) vehicles until the end of 2025, under certain terms and conditions.
“The regulation provides incentives to manufacturers to test the market for those who are committed to building production capacity in Indonesia,” Kaimuddin explained.
He expressed optimism that the target of producing 600 thousand electric cars by 2030 would be achieved. He said he hoped that a ministerial regulation from related ministries would be issued before the end of the year.
“We are still waiting on the ministerial regulation. Four ministries are working on this, namely the Finance Ministry, Trade Ministry, Industry Ministry, and the Coordinating Ministry for Maritime Affairs and Investment,” he added.
Meanwhile, Energy and Mineral Resources Minister Arifin Tasrif shed light on several strategies to accelerate the achievement of the new and renewable energy mix target in Indonesia, reported ANTARA news agency.
At the “National Seminar on Indonesian Economic Outlook 2024,” here on Friday, he explained that Indonesia has a target to achieve a 23-per cent renewable energy mix by 2025.
However, the current progress towards energy transition is still far from the goal, he pointed out.
“Our current achievement is still far away (from the target), approximately 60 per cent of the target, even though it is only two years away,” he remarked.
He noted that the COVID-19 pandemic, infrastructure, and demand factors are challenges in achieving the new and renewable energy mix target.
Tasrif explained that in terms of infrastructure, the government has designed a transmission network that can expand access to new and renewable energy sources in the country.
Meanwhile, from the demand side, he highlighted the need to streamline related regulations or policies to attract investment in the field of new and renewable energy.
“We must create demand. (We need to work on) how to fulfill new electricity demand that is growing significantly with renewable clean energy,” he emphasised.
On that occasion, he drew attention to ongoing new and renewable energy projects that should be made more efficient.
“Some efficiency programmes that can be carried out include replacing liquefied petroleum gas (LPG) for natural gas,” he stated.
Tasrif explained that Indonesia annually imports 5.5 million tons of LPG despite continued exports of natural gas reserves and having production levels that tend to increase.
With the discovery of new sources, the minister affirmed that Indonesia can accelerate natural gas production. Hence, he encouraged transmission development, so that public access to natural gas can be more affordable and can reduce LPG imports.
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