Indonesia is focusing on developing the electric car battery industry. Currently, there have been several new policies regulating electric vehicles. This policy is to attract investors to invest in Indonesia. Indonesia has also formed the Indonesia Battery Corporation (IBC), which was built by 4 BUMN for the development of electric vehicle battery cells in Indonesia. Indonesia has the largest reserves of nickel resources in the world as a raw material for the battery industry and the development of electric cars is one of the main attractions for electric car manufacturers to invest in Indonesia. In addition, the provision of incentives such as 0% PPnBM for electric cars and tax holidays is also one of Indonesia's attractions to investors.
So far, several companies have started investing in batteries and electric vehicles in Indonesia. Some of the major electric vehicle players investing in Indonesia include:
Minister Luhut Binsar Pandjaitan said that Tesla already has a non-disclosure agreement (NDA) with Indonesia regarding Tesla's investment plan in Indonesia.
2. LG Energy Solution
LG Energy Solution plans to establish an integrated battery industry with an investment of 9.8 billion USD. The Indonesian government has signed a memorandum of understanding with LG Energy Solution in December 2020.
3. Contemporary Amperex Technology (CATL)
Contemporary Amperex Technology (CATL) plans to build a battery industry with a value of up to 5.2 billion USD in Indonesia. CATL has pressed an agreement with state-owned company PT Aneka Tambang which will guarantee 60% nickel from Indonesia will be processed by CATL in Indonesia. The CATL battery factory is planned to start operating in 2024.
4. Badische Anilin-und Soda-Fabrik (BASF)
Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia said that Badische Anilin-und Soda-Fabrik (BASF) will sign an investment contract in Indonesia.
Hyundai has a plan to start producing electric cars in March 2022. Currently, the total investment has reached 1.5 billion USD or the equivalent of 20 trillion rupiahs. The total investment realization has reached IDR 14 trillion. Hyundai has also relocated its head office for the Asia Pacific from Malaysia to Indonesia.
Toyota has increased investment for Indonesia by 2 billion USD until 2024. In the next 5 years, Toyota will prepare 10 types of electric vehicles for the Indonesian market. In addition, Toyota will also produce hybrid cars locally in 2022.
Honda will relocate its factory from India to Indonesia. Honda is also committed to building electric-based cars in Indonesia. Honda has spent an additional investment of 5.2 trillion rupiahs for investment until 2024.
With the presence of large companies investing in electric vehicles and electric vehicle batteries in Indonesia, the future for this industry is promising. Based on data from the Ministry of Energy and Mineral Resources (ESDM), electric vehicles in Indonesia are potential to reach 125 thousand units for electric cars and 1.34 million units for electric motors this year.