PT Toyota Motor Manufacturing Indonesia (TMMIN) is ready to start electric vehicle (EV) production at its factory located in Karawang, West Java - Photo by the Company

JAKARTA (TheInsiderStories) – Local car maker, PT Toyota Motor Manufacturing Indonesia (TMMIN) is ready to start electric vehicle (EV) production at its factory located in Karawang, West Java, local media reported. As known, the government targeting share of EV output to reach 20 percent of national’ total car production by 2025.

Warih Andang Tjahjono, TMMIN president director, as quoted by Antara, a change in the production line is required to run the planned. The company is attempting to produce hybrid vehicles in Indonesia. Hybrid vehicle is perceived as being better aligned toward the production of electric vehicles since its engine uses both battery and gasoline.

Toyota Indonesia expect to produce the hybrids car starting 2022 with sport utility vehicles (SUV) and multipurpose vehicles (MPV) as a start. Last June, industry minister Airlangga Hartarto and his Japanese counterpart, economy, trade, and industry minister Hiroshige Seko, has signed the agreement on the planned.

The agreement was part of wider cooperation in manufacturing between the two countries under the Indonesia-Japan Economic Partnership Agreement. He said, “This agreement covers cooperation in the automotive, electronic, chemical, fabric and textile, chemical and food, and beverage sectors.” 

While, the energy and mineral resources ministry is still formulating the ministerial regulations governing the use of public EV charging stations. According to the director general at the ministry, Rida Mulyana, the regulation would not only regulate tariffs, but also the security standards and business management patterns.

He ensured that ministerial regulations would be issued this year. While, state-owned power producer PT Perusahaan Listrik Negara (PLN) inaugurated nine charging station units in Tangerang, Jakarta, Bandung in West Java, and Bali with a tariff of around Rp1,400 (US$0.1) per kilowatt hours.

Acting CEO PLN, Sripeni Inten Cahyani, explained the company is still waiting for the government’ decision to regulate the electricity tariff at the charging station.

Recently, Indonesian President Joko Widodo said that he wants to see Indonesia’ automotive industry move into the manufacturing of electric cars soon. He has also pushed the country’ nickel miners to support the development of batteries for electric cars. The government has also prepared emission-based tax cuts for cars to encourage EV development.

Last month, Widodo has signed presidential decree on the electric vehicle, to prompt investors immediately start the industry. The decree contained a series of incentives such as reduction in import tariffs for machinery and materials and lower luxury taxes for buyers.

“We knew that 60 percent of electric vehicles’ essential element is in the battery. We have all of the minerals, like manganese, cobalt and so on to produce the battery. With business strategies we can arrange and initiate the electric car industry that produces highly competitive and affordable products as we have the materials here,” the president told media in August.

Indonesia aims to become an EV hub for Asia and beyond with a target to start the production in 2022 and share reach 20 percent of total car production by 2025. Some big foreign car maker like Japan’ Toyota Motor Corp., to invest $2 billion and South Korea’ Hyundai Motor would invest and $880 million in the country to develop EVs over the next few years.

Developing the electric vehicle industry may take longer time than two or three years as there are many factors, including the market, that need to be considered as prices of electric cars are averagely 40 percent more expensive than regular cars, he said.

He, however, was optimistic that the price of electric vehicles can be reduced to an affordable level as Indonesia has the essential minerals to produce the battery.

Proposing several policies to support the operation of electric vehicles, the president said that the option to provide subsidy for electric vehicles is considerable, coupled with several incentives in organizing their administration documents.

“Such policies can initially be applied in Jakarta, particularly in public transport vehicles like buses, minibus, and taxis,” the president said.

Indonesia is now the largest car market in Southeast Asia with 1.15 million cars sold in the country last year. The government is targeting to export 1 million cars by 2025 from this year target 340,000 units.

Therefore, the government is determined to create a conducive business climate through harmonization and synchronization of regulations in the automotive sector.

US$1=Rp14,000

by Linda Silaen, Email: linda.silaen@theinsiderstories.com