Indonesia gives automakers more time to qualify for EV credits in investment bid (updated)

Wuling Motors Holdings

10/08/2023 13:17

(Adds detail on China's Neta and Mitsubishi investment plans,
recasts first paragraphs, adds detail on Wuling price cut)
    By Stefanno Sulaiman
       TANGERANG, Indonesia, Aug 10 (Reuters) - Indonesia said
on Thursday it would give automakers two more years to qualify
for electric vehicle incentives in Southeast Asia's largest auto
market, a move followed by investment commitments by China's
Neta EV brand and Mitsubishi Motors.
    The moves announced at the Jakarta auto show come as
Indonesia races Thailand and India to build out an EV industry
as an alternative to China, the world’s largest producer. 
    Under the relaxed investment rules announced Thursday,
automakers need to commit to producing at least 40% of the
content of EVs in Indonesia by 2026 to qualify for incentives,
two years later than the initial target. The 40% threshold had
been set to encourage local battery production.
    "The relaxation on the local content requirement is to
attract the investors," Indonesia's industry minister Agus
Gumiwang Kartasasmita told reporters on the sidelines of the
Jakarta auto show.
    Indonesia is Southeast Asia’s largest auto market and its
second-largest production hub behind Thailand. Toyota  7203.T ,
its affiliate Daihatsu and Honda  7267.T  account for two-thirds
of sales but have been slow to pivot to EVs.
    Indonesia’s government has set an ambitious target of
producing some 600,000 EVs by 2030. That would be more than 100
times the number sold in Indonesia in the first half of 2023.
    Indonesia had earlier said it would reduce import duties
from 50% to zero for EV makers planning investments. That was
seen as aimed at attracting Chinese EV makers and potentially
Tesla  TSLA.O , a company the government has long courted.
    “We roll out incentives for all the global carmakers, not
for a certain name only,” Agus said.
    The industry ministry said Mitsubishi Motors  7211.T  had
committed about $375 million to expand production, including for
the Minicab-MiEV electric car. Mitsubishi said production of the
EV would start in December. 
    Neta, an EV brand of China's Hozon New Energy Automobile,
said it had begun taking orders for the Neta V EV and would
start local production in 2024.
    Until now, only two manufacturers have shifted enough
production to Indonesia to qualify for full incentives: Wuling
Motors  0305.HK  and Hyundai  005380.KS . Both have factories
outside Jakarta and lead the market in EV sales.
    Wuling offers the cheapest EV on offer in a market where
analysts say affordability is one challenge to wider adoption.
The Chinese carmaker plans to announce a cheaper version of the
Air EV, starting at around $13,200, people familiar with its
plans told Reuters.
    Wuling did not immediately respond to a request for comment.
    Toyota used its presentation at the Gaikindo Indonesia
International Auto Show outside Jakarta to showcase locally
produced hybrids. Toyota said it would deploy 200 charging
stations at dealerships but had not committed to building EVs
locally.
    "We don't have a concrete plan yet," Hiroyuki Ueda,
president of Toyota-Astra Motor, a joint-venture between the
Japanese carmaker and Indonesian conglomerate PT Astra
International  ASII.JK , told Reuters. 

 (Reporting by Stefanno Sulaiman;
Editing by Kevin Krolicki and Conor Humphries)
 ((kevin.krolicki@thomsonreuters.com))