Indonesia to play bigger role in EV manufacturing

As many Indonesians behold, the largest country in Southeast Asia is fulfilling electric vehicle ambitions to play a bigger international role thanks to its rich nickel resources.

Indonesia will be able to provide local materials for EV car making, said Adrianto Djokosoetono, president director of Indonesia's largest taxi operator PT Bluebird. "And we are optimistic. Our EV fleet will rise to 500 by the end of this year."

In 2022, around 15,400 electric cars and approximately 32,000 EV motorcycles were sold in Indonesia. Bluebird is seen as a potential buyer of an EV fleet from BYD.

The automotive industry in Indonesia has played a significant role in its economic growth, contributing 11 percent of the GDP in 2022 compared with about 10 percent in 2017.Now Southeast Asia's largest automotive market, Indonesia wants to become a future hub for the automotive market in the region.

While Japanese brands still dominate the traditional Indonesian automotive industry, those from China and other countries are becoming more visible.

PT Prima Wahana Auto Mobil in West Jakarta sees an uptrend in its EV sales. "People buy and use Wuling Air EV as a second car. They already have a standard one," Sekar, a sales staff at PT Prima Wahana which sells Wuling brands, said.

The government has now shifted its ambitions, from merely boosting its automotive industry as a whole to also having a fast-growing electric vehicle industry and building Southeast Asia's automotive manufacturing hub and to help advance critical climate goals.

Indonesian President Joko Widodo has proclaimed this goal with grounded reasoning. Abundant reserves like nickel, cobalt, copper, bauxite and tin should bring greater potential for his country to create reliable EV ecosystems for Southeast Asia and the world at large. Moreover, Indonesia is the world's largest nickel producer with others like the Philippines and Russia on top. Its nickel reserves account for 24 percent of the world's total, making it the world's largest source of the commodity.

Last month, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan was at BYD's headquarters in Shenzhen with BYD CEO Wang Chuanfu. The minister witnessed the signing of an agreement between the Indonesian government and the Chinese firm.

Nickel reserves

Chinese investors are already involved in at least two largest nickel mining and nickel smelting projects in Sulawesi, the island with the largest nickel reserves. Those projects belong to the publicly listed Indonesia Morowali Industrial Park and public company Virtue Dragon Nickel Industry. Also in Sulawesi are publicly listed Vale Indonesia, majority ownership of Canadian-based assets, Central Omega Resources and publicly listed Aneka Tambang.

So far, Indonesia has not seen any EV electric battery plant in operation.

Early this year, Investment Minister Bahlil Lahadalia said that LG Corporation from South Korea and Contemporary Amperex Technology from China were establishing EV battery operations in Indonesia.

China's carmaker Wuling Motors and multinational company Gotion Hi-Tech have reportedly reached an agreement to produce EV batteries in Indonesia. A British consortium that includes mining giant Glencore will reportedly invest in Indonesia's mining and EV manufacturing sector.

A survey conducted early this year showed rising interest in owning EVs due to the government's subsidy policy, which is effective from March until December.

The writer is a freelance journalist for China Daily.