Electric Car - Photo by: Ministry of Industry Office

JAKARTA (TheinsiderStories) – Indonesia’s Ministry of Industry has completed an assessment of the planned presidential decree on electric car as part of government move to boost the use of green energy utilization in the country and reduce gas emissions.

Director of Maritime Industry, Transportation Equipment and Defense Equipment for the Ministry of Industry, Putu Juli Ardika said on Wednesday (17/10), the official draft has been sent to the Coordinating Ministry of Maritime Affairs on Oct. 15 to be coordinated and requested approval from President Joko Widodo.

Since early of 2018, the government has announced to produce presidential decree that will pave the way for the development of the electric car in the country. Minister of EMR, Ignatius Jonan has stated that it is time for Indonesians to use electric cars as it is more practical and environmentally friendly compared to oil-fueled cars.

Many developed countries are starting to leave the sale of hydrocarbon-fueled cars and switch to electricity. The Government of Britain and France have even made bold steps to prohibit non-electric vehicle sales for highways starting 2040.

The government also drafting a regulation that will slash the luxury goods sales tax and import duty of electric car, said Industry Minister Airlangga Hartarto said on Feb. 26. Indonesia, he stated, to slash the luxury tax to 0 percent and import duty to 5.0 percent and its expect will be finalized within one month.

Indonesia is still far behind in the development of the electric cars. Industry players have blamed lack of infrastructure support, such as charging points or stations, which discouraged car makers to produce electric cars.

Some industry players also demand the government to provide incentives in order to lure car makers to produce electric cars. Such incentives are needed to encourage car makers to produce electric cars and catch up with other countries.

Globally, China has taken the lead in developing electric cars. Goldman Sachs has said that China is expected to supply 60 per cent of the world’s electric vehicles by 2030, up from 45 per cent in 2016.

Minister Hartarto admitted that Indonesia needs time to prepare regulatory framework, infrastructure support and technology development. He said the plan to develop electric car has already been included in the country’s national vehicle industry roadmap.

The government needs to look at the readiness of electric cars component producers, such as battery and power control unit, before issuing new regulations. Hartarto said the government targets that by 2025, around 20 percent of cars produced in Indonesia will be low carbon emission vehicles, including electric cars.

Global carmakers such as Nissan Motor Corp., and Mitsubishi Motors Corp., have rolled out their electric cars for the mass market in 2010. But the electric vehicle revolution failed to materialize and much of their investments went sour.

To capture the market for these vehicles, global carmakers from Volkswagen to Tesla are attempting to lock in supplies of raw materials that are needed to increase production of lithium-ion batteries, which will power this electric revolution.

Many developed countries are starting to leave the sale of hydrocarbon-fueled cars and switch to electricity. The Government of Britain and France have even made bold steps to prohibit non-electric vehicle sales for highways starting 2040. 

Ardika added, the ministry sees, the automotive industry in Indonesia is still showing a positive stretch in an effort to improve its performance amid the dynamics of the global economy. This strategic sector further deepens its manufacturing structure so that it is believed to be more globally competitive and able to meet the needs in the domestic and export markets.

In 2017, the automotive industry contributed to the national economy of 10.16 percent and was able to absorb direct employment of around 350 thousand people and indirect labor of 1.2 million people.

Written by Staff Editor, Email: theinsiderstories@gmail.com

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