Indonesia Chases Volvo, Renault Investment in Electric Vehicles
The government has asked Renault and Volvo to consider building factories or assembly units in Southeast Asia’s largest market for cars, as it eyes production of 750,000 electric vehicles by 2030, said Harjanto, director general of metal, machinery, transportation and electronics at the industry ministry. The country’s total vehicle production is seen more than doubling to 3 million units during the period, he said.
President Joko "Widodo" Widodo has promised tax incentives to draw foreign investment in electric vehicles while also making it expensive to own fossil fuel-powered automobiles to save the country about 798 trillion rupiah ($56 billion) from reducing dependence and imports of crude oil. While Hyundai Motor and Volkswagen have shown interest in manufacturing electric vehicles, a consortium of Chinese and Indonesian companies is already building a battery plant, according to Industry Minister Airlangga Hartarto.
Abundant reserves of nickel ore, a key raw material in electric batteries, is an advantage Indonesia wants to tap for developing its electric vehicle industry and one company has started work on producing raw materials for electric batteries, Harjanto said. Once a battery production facility is in place, it would be easy to draw vehicle manufacturers, he said.
PT Pertamina, Indonesia’s state-owned energy company, has announced plans to begin electric battery production, while PT Blue Bird will start adding electric cars to its taxi fleet from this year.
Indonesia expects the establishment of an electric vehicles industry to boost its sagging exports, Harjanto said. The signing of a free-trade agreement with Australia in March will allow the country to export the vehicles duty free, he said.