The BYD Group of China and the US automotive and clean energy producer Tesla are in their final stage to invest in Indonesian electric vehicles (EVs) industry, according to Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan.
Established in 1995, BYD Co. Ltd., or Build Your Dreams (BYD), is a conglomeration that manufactures automobiles, buses, electric bicycles, trucks, forklifts, solar panels and rechargeable batteries.
Meanwhile, Tesla Inc. designs and manufactures EVs, battery energy storage from home to grid-scale, solar panels, solar roof tiles and related products and services.
Indonesia is ready to have EV ecosystem
Luhut highlighted the enthusiasm from the BYD and Tesla to invest in Indonesia’s EV industry.
“All the world’s big [electric] carmakers will enter our market. The world’s number one BYD Group, number two Tesla, Hyundai and others have all finalized their agreements with Indonesia,” he said on January 17, 2023, as reported by cnnindonesia.com.
State-owned mining holding company MIND ID has signed an agreement with Chinese battery company Contemporary Amperex Technology Co. Ltd. (CATL). The agreement contains the construction of EV vehicle batteries.
Luhut said that Indonesia would be ready to enter a new era of building lithium batteries and electric cars in the future.
“If everything goes according to plan, our first lithium battery will be produced in 2025. In 2027, we will probably become one of the top three lithium battery producers in the world, including producing electric cars,” he added.
Luhut also said that the government has rolled out attractive investment incentives for potential investors to build their factories here.
President Joko “Jokowi” Widodo had said after a meeting with Tesla founder Elon Musk in mid-May 2022 in Texas that he was keen to see the electric carmaker build a factory in Indonesia. “What we all want is the electric car, not the battery. For Tesla, we want them to build electric cars in Indonesia,” Jokowi said in August 2022.
Risk of EVs in Indonesia
Despite the government’s optimism, Indonesia still has problems regarding the EVs such as infrastructure and financial problems.
On infrastructure, the lack of EV battery charging stations in Indonesia – which are still focused in the capital – has prevented electric car owners to roam the streets outside Jakarta freely.
Around 95% of Indonesians still think that the price of EVs are too expensive whereas the resale price drops drastically.