The Ministry of Industry is directing automotive component manufacturers to expand into producing parts for other transportation sectors amidst accelerating global shift from conventional cars to electric vehicles (EVs).

Mahardi Tunggul Wicaksono, Director of Maritime, Transportation Equipment, and Defense Industries at the Ministry of Industry, said conventional cars require tens of thousands of components, while battery-based EVs use fewer than 10,000.

“We have already encouraged manufacturers to begin shifting production from automotive vehicles and expand into the aviation and maritime industries,” Tunggul said on Monday, August 25, 2025.

He noted that this strategy will help maintain factory utilization as demand for conventional vehicles declines.

According to him, the transition is feasible since domestic auto component makers already possess the necessary technology, production equipment, and facilities to diversify.

“The growth of the EV industry will inevitably impact national component manufacturing because demand for conventional auto parts will decrease,” he added.

On the other hand, Indonesian Automotive Industry Association (Gaikindo) Secretary-General Kukuh Kumara cautioned the government against sacrificing economic stability in pursuit of the net zero emissions (NZE) target.

“Don’t let our NZE commitment undermine the national economy, as the consequences could be severe. ICE (Internal Combustion Engine) and EV should be allowed to run side by side,” Kukuh said, on Monday, August 25, 2025.

He also warned that Indonesia’s auto industry is entering a new era led by China, replacing Japan’s long-standing dominance. He stressed that Chinese auto component companies will eventually seek local partners to access the domestic market.

Kukuh urged the government to align incentives with this new reality, saying such measures could attract foreign investors.

“If incentive policies remain consistent with agreements, it will send a positive signal to international businesses,” he said.