Electric Vehicles Are The Future Of Indonesia's Automotive Industry - Jokowi

Photo: CNA. President Jokowi underscored that electric vehicles are the future of Indonesia's automotive industry, ANTARA reported. Indonesia could become a part of the global supply chain for the production of electric vehicles because it is endowed with an abundance of nickel mineral raw materials that can be processed into batteries, the president said.

"Yes, it is true that the future of Indonesia's automotive industry lies in electric cars. This is because we have a rich supply of nickel and other materials," said President Joko Widodo during his visit to the 2024 Indonesia International Motor Show (IIMS) at JIExpo Kemayoran, Jakarta on Thursday (15/2/2024).

The government, according to Jokowi, will offer incentives to maintain increased investment, population growth, and the advancement of the electric vehicle sector. Value Added Tax (VAT) reduction is one of the steps that need to be taken to lower the cost of electric vehicles. The President went on to say that his party intended to offer incentives for public transportation in addition to private electric vehicle incentives. The intention is to enable Indonesia to produce every kind of electric vehicle needed for both personal and public transportation.

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, also mentioned that more and more foreign manufacturers and brands of electric vehicles are making investments in Indonesia, including two Chinese automakers, Chery and BYD. In addition, Indonesia will also welcome Vinfast, a Vietnamese electric vehicle manufacturer.

Indonesia will offer an incentive for the government to pay the Value Added Tax (VAT) (DTP VAT). He clarified that the Ministry of Finance is currently in charge of overseeing this tax incentive. The government also intends to introduce financial incentives for hybrid cars. 

"There are ongoing discussions within the industry. The President has requested incentives for hybrid vehicles because based on sales, hybrid cars have a higher demand compared to electric vehicles, indicating that hybrids could be a middle solution," said Airlangga. The Indonesian Automotive Industry Association (Gaikindo) has reported that 17,038 pure electric vehicles will be sold nationwide in 2023. The aforementioned represents 1.69 percent of the total automobile sales nationwide in 2023, or 1,005,802 units.