July 18, 2019 / 11:51 AM / a month ago

Indonesia aims to start electric vehicle production in 2022

JAKARTA (Reuters) - Indonesia is aiming to start producing electric vehicles (EVs) in 2022, a senior official at the Industry Ministry told Reuters on Thursday, after a number of companies disclosed plans to invest in the country.

Indonesia is pushing for the development of EV and battery production facilities to create a downstream industry for the country’s rich supplies of nickel laterite ore, which is used in lithium batteries.

Companies such as Toyota Motor Corp and Hyundai have expressed interest in building EV plants in Indonesia, Southeast Asia’s second-largest car production hub.

Toyota has committed to invest $2 billion in Indonesia over the next five years, part of which will be used to produce EVs, Industry Minister Airlangga Hartarto, told reporters on Thursday.

“By 2022, production of electric-based vehicles should start,” said Harjanto, director general of metal, machinery, transportation and electronics at the Industry Ministry, adding that the government has targeted EVs to reach a 20% share of national car production by 2025.

Speaking on the sidelines of Indonesia’s largest car show, Harjanto said the government is finalising the revision of a luxury car tax scheme to encourage the production of cars with lower carbon emissions.

The government is also offering tax holidays for companies producing EV batteries in Indonesia.

“Recently there were a few battery companies which met the (industry) minister, but it is still an initial intention,” Harjanto said, declining to name the companies.

“They see Indonesia has big potential to develop electric-based products due to the availability of raw material,” he said.

Several companies are currently developing smelters with high pressure acid leach (HPAL) technology to produce battery chemicals in Indonesia, including China’s Tsingshan Group.

Reporting by Bernadette Christina; Writing by Fransiska Nangoy; Editing by Kirsten Donovan

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