Insight: Indonesia Concern to Develop Electric Car

Bakrie & Brothers Electric Car - Photo by the Company

JAKARTA (TheInsiderStories) – The Indonesian government is taking the necessary steps toward developing and producing electric vehicles in the future. The policy laws should be completed by early next year. The government is encouraging the electric car industry’s development, with plans to start construction next year. Firstly, for electric motorbikes and the battery industry.

The electric car industry is now increasingly visible, with the government’s encouragement to formalize presidential regulations regarding electric cars. At present, the presidential regulation draft is entering the stage of alignment in their respective ministries after being discussed with the Parliament.

This alignment includes the approach to the availability of electricity through the Ministry of Energy and Mineral Resources, tax incentives within the Ministry of Finance and the Ministry of Industry, with staged plans towards the realization of the industry. The government set a completion target of early 2019. Afterwards, this regulation can become a guideline for all industries, including private.

On the other hand, the Ministry of Industry suggested that the rules of electric cars involved various related parties. These includes involving independent institutions in the discussion process, such as researchers from educational institutions, like Indonesian university and Bandung technology institute, Usrabaya technology institute, as well as local electric vehicle industry producers, such as GESITS, Molina, Aplikabernas, MAB, and BNBR. Production of domestic electric cars will have the benefit of increasing automotive components imports, such as lithium ion based batteries.

The Bakrie & Brithers Tbk (IDX: BNBR), for example, plans to become a driver of the domestic electric cars industry. The company wants to fill electric cars with a certain level of domestic content (LDC), targets amount to 55 percent in 2022. The Bakrie Group, through PT Bakrie Autparts, it subsidiaries, claimed that, by joint venture with BYD Auto Co.Ltd, a leading automotive industry corporation from China, they can develop a new-line business in the automotive industry. The deals, worth US $300 million were signed in April of 2018. This is a great opportunity for the government to have a joint venture with the group.

Recently, the government launched the electric vehicle charging station (EVCS). This example of the latest technological engineering is intended to encourage the realization of electric cars government expansion. As we know, the government has a target of 20 percent for the production of low carbon emission vehicle (LCEV) in 2025.

So far, the agency has only prepared two stations, the first is the fast charging 50 kw station in Jakarta and the second is the 20 kw smart charging station at the central of knowledge and technology office, South Tangerang. In the future, similar stations can be spread, not only in Jakarta, but also in the big cities nationwide. The total investment spent for the project is up to Rp 500 million each unit.

Just now, the state oil and gas mining company and the Eleven March state-university are developing batteries for electric cars. However, the government claimed that Indonesia would build the largest lithium battery factory in Indonesia at Morowali Industrial Park (IMIP), Central Sulawesi, starting on January 11, 2019. The construction is planned to take two years, so that by 2021 it can be in production. IMIP already has investors from China, Japan and Korea. For the initial step, the investors will pour funds of around US$ 700 million.

The government is also committed to encouraging the development of electric cars which are environmentally friendly. At present the government is preparing fiscal incentives that will be given to electric cars, ensuring the price can be affordable. Incentives will be in the form of tax holidays, government borne import duty, and export financing and working capital credit assistance to procure battery swaps to promotion assistance. Including the sales tax on luxury goods, road maps rather than cars, including sedans and electric cars.

The study and research show that electric cars are considered capable of saving up to 80% more energy when compared with conventional cars that use fuel. Electric cars can use half the fuel compared with B20 fuel (6 million kl fuel). Innovations in electric cars can also encourage increased government budgets for research. Industry target 4.0, in 2030 the budget is 2% and now only reaches 0.08%.

The automotive industry is also preparing to incorporate plug-in hybrid electric vehicle as a solution to infrastructure constraints. The industry installed a power plant in a car using fuel like biodiesel-20. Currently there are no 380 watt electric car charging stations, the voltage is 220 watts different. However, the preparation of infrastructure such as an electric charging stations must be accelerated because electric cars require a power booster time of two hours. Fuel vehicles only take two minutes to charge.

Written by Daniel Deha, Email: