The government of Indonesia reportedly had a business proposal to Chinese automotive giant Geely. Minister Luhut Pandjaitan shared that the country is seeking the foreign automaker’s help in producing a homegrown electric vehicle model by 2025 or 2026, Reuters reports.
Offer details
Minister Pandjaitan revealed in a seminar that he asked Geely to establish a domestic EV production in the country as an Indonesian brand by 2025 or 2026.
Interestingly, the minister supervising the country’s natural resources and investment regulations confirmed Geely’s positive response.
“I have offered Geely, do you want to make cars in Indonesia, but be an Indonesian brand and do the research in Indonesia? They said yes.”
Minister Luhut Pandjaitan
According to the report, Indonesia would supply Geely with crucial minerals like nickel ore to manufacture the power batteries locally. In return, the country must lead the research for the technology.
Indonesia’s EV push
The Indonesian Government has intensified its electrification strategies to attract more foreign investments in its EV industry.
It leverages the country’s abundant nickel reserves, which are critical minerals for EV battery production.
The government also announced subsidy programs for EVs, including the seven million rupiahs for 250,000 electric motorcycles/scooters. However, the subsidies for e-cars and e-buses are yet to be disclosed.
It also reduced taxes for EVs from 11% to just 1% in April 2023 for models with at least 40% local content. Hyundai’s popular IONIQ 5 is among the EVs qualified for the tax credit.
Investments
Market leaders like Tesla and BYD gained considerable interest in investing in the country owing to the government’s support for the industry. However, their potential investments have yet to materialize.
Vietnamese electric automaker VinFast also announced a $1.2 billion investment in the country on Monday, with plans to open a local factory by 2026.
In August, Chinese Hozon New Energy Automobile and Japanese Mitsubishi Motors also confirmed plans to invest in domestic production in the country.
See Also:
- Indonesia to launch new set of incentives for electric automakers, organizes a meeting with Tesla and BYD
- Tesla, BYD to invest in EV production plants in Indonesia
- Hyundai Motor dominates the Indonesian EV market in Jan-July 2023
- Tesla to invest “quite big” in an Indonesian battery factory
- Indonesian government imposes price ceilings for EV charging
Indonesia has the largest economy in the Southeast Asian region. That said, automakers investing in the country can tap into this large customer pool. It is also home to the biggest nickel reserves in the world at 21 million metric tons.
