Airlangga Reveals Investment In EV Industry Strengthens The Era Of Electric Vehicles

JAKARTA - The government continues to strengthen its commitment to developing the electric vehicle (EV) ecosystem in Indonesia through collaboration with various parties including world automotive companies.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that the development of the EV ecosystem itself continues to be echoed to support efforts to transform sustainable, environmentally friendly mobility and encourage Indonesia to become one of the production centers of electric vehicles.

"The government also encourages incentives for import Duty for 4-wheeled Battery-Based Electric Motor Vehicles by 0 percent in the form of Completely Built Up and Completely Knocked Down, as well as PPnBM incentives for 4-wheeled KBLBB to accelerate electric cars in Indonesia," he said in his official statement, Friday, January 19.

Furthermore, Airlangga emphasized that the use of electric vehicles in Indonesia will be increasingly massive. Throughout 2023, domestic sales of electric cars were recorded at 17,147 units and exports of electric cars were recorded at 1,504 units.

Meanwhile, sales of hybrid cars in 2023 reached 54,656 units and exports reached 27,710 units. In addition to efforts to develop the EV ecosystem in Indonesia, the automotive industry or transportation equipment is one of the major contributors to the national economy.

The growth of the transportation equipment industry continued to be positive for ten consecutive quarters and grew above national economic growth of 7.31 percent (yoy) in the third quarter of 2023.

The automotive industry in Indonesia is supported by 26 four-wheeled motor vehicle industry companies with a total production capacity of 2.35 million units per year.

Airlangga explained that currently the production of four-wheeled motorized vehicles for domestic has reached around 1 million units and exports are close to 500 thousand units. The automotive industry also absorbs 1.5 million workers, from the automotive tier-1 supply chain to tier-3.

Airlangga on this occasion also appreciated BYD for investing USD 1.3 billion in Indonesia with a production capacity of 150 thousand units per year in the KBLBB industry in Indonesia.

The realization of BYD's investment in Indonesia is expected to be carried out in the not too distant future so that BYD products can immediately diversify the types of electric cars in Indonesia.

"Of course I hope that this is a strengthening of the era of electric vehicles and environmentally friendly ecosystems. The government also encourages BYD Indonesia to be able to improve local content so that it can encourage industrial competitiveness and integrate both backward and forward linkage," concluded Airlangga.