Tesla Disappears, BMW And Mercedes-Benz Appear: The Government Claims German Giants Are Interested In Electric Car Investment In Indonesia

Minister of Industry Agus Gumiwang Kartasasmita while in Germany (Photo: Doc. Kemenperin)

JAKARTA - The government through the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita claims to have succeeded in attracting the interest of two German car manufacturers, namely BMW and Mercedes-Benz to build fuel cell-based car production facilities in Indonesia.

“BMW has expressed interest in building this ecosystem in Indonesia. Mercedes-Benz is also willing to cooperate and is exploring opportunities to export vehicles to Australia and ASEAN, they plan to make Indonesia a production hub," he said as quoted by the official website, Sunday, October 31.

According to the Minister of Industry, Indonesia's seriousness in supporting environmentally friendly technology is proven through the issuance of Presidential Regulation Number 55 of 2019 concerning the Acceleration of the Battery Electric Vehicle (BEV) Program for Road Transportation.

“It is very important for investors to invest in Indonesia because we believe that in the future there will be an increase in EV demand in the world. Indonesia has a target for developing main components for EVs such as batteries, electric motors, and inverters," he said.

Meanwhile, the RI proposal that was eyed by a pair of world automotive giants was that Indonesia had signed a Comprehensive Economic Partnership Agreement (CEPA) with Australia since July 5, 2020.

On this occasion, it was determined the elimination of the CBU vehicle trade tariff (Completely Built-Up) to 0 percent for passenger car types produced in Indonesia for export to Australia.

"German cars such as BMW and Mercedes-Benz are the most popular premium brands in Australia in 2020. This is a great opportunity for us to seize the opportunity," he said.

For information, BMW Indonesia and its local partner PT Tjahja Sakti Motor have manufacturers for around nine passenger car models, with a production performance of 1,470 units in 2020, and 1,152 units from January to September 2021.

Then, Mercedes-Benz Indonesia (PT MBI) produces about eight-passenger car models, with production performance in 2020 as many as 457 units, and January to September 2021 as many as 224 units.

Meanwhile, the national automotive industry recorded a growth of 45.7 percent in the second quarter of 2021. Currently, there are 21 industrial companies of four-wheeled motor vehicles or more with an investment value of Rp71.35 trillion and a production capacity of 2.35 million units per year.

"The automotive industry is able to employ more than 38,000 direct workers and around 1.5 million people along the industrial value chain," said the Minister of Industry.

Previously, the world's electric car industry leader, Tesla, reportedly preferred Australia over Indonesia as a production supply chain base, especially in the procurement of lithium battery raw materials.

Then, the company created by Elon Musk also established Bangalore in India as one of Tesla's development centers outside the United States. Even though Indonesia was predicted to be Tesla's strategic partner in the innovation of the 4.0-tech vehicle.