Indonesia to relax timetable for EV credits in bid for investment

Wuling Motors Holdings

10/08/2023 09:01

By Stefanno Sulaiman
       TANGERANG, Indonesia, Aug 10 (Reuters) - Indonesia will
give automakers two more years to qualify for electric vehicle
incentives in a bid to bring more EV-related investment to
Southeast Asia’s largest auto market, Indonesia’s industry
minister Agus Gumiwang Kartasasmita said on Thursday.
    Under the relaxed rules, 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,” Agus told reporters on the sidelines of
the Jakarta auto show.
    Indonesia’s Ministry of Industry had earlier said it would
reduce import duties from 50% to zero for automakers planning EV
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.
    Until now, only two manufacturers have shifted enough
production to Indonesia to qualify for full incentives: China's
Wuling Motors  0305.HK  and Hyundai  005380.KS . Both have
factories outside Jakarta and led the market in EV sales in the
first half of the year.
    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 electric vehicles by 2030. That would be
more than 100 times the number of EVs sold in Indonesia in the
first half of 2023.
    Analysts say Indonesia faces a number of challenges as it
races Thailand and India to build out an EV industry as an
alternative to China, the world’s largest market. Those
challenges include charging infrastructure and affordability. 
    On Thursday, the industry ministry said Mitsubishi Motors
 7211.T  had committed the equivalent of $375 million to expand
production, including for the Minicab-MiEV electric car.
    More than 20 automakers have vehicles on display at the
Gaikindo Indonesia International Auto Show outside Jakarta.
    Toyota used its presentation to showcase locally produced
hybrids and a hybrid version of a luxury minivan, the Alphard.
Toyota said it would deploy 200 charging stations at dealerships
but had not committed to building EVs in Indonesia.
    "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)
 ((kevin.krolicki@thomsonreuters.com))