Indonesia Ready to Become the World's Center for Electric Vehicle

VIVA – The Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves) stated that the electric vehicle (EV) transition is key to the sustainability of the automotive industry in Indonesia along with the increasing use of electric vehicles in the world.

Rachmat Kaimuddin as Deputy for Infrastructure and Transportation Coordination of the Ministry ensured that Indonesia is ready to capture the economic opportunities of the electric vehicle industry, and can become a world-class industrial center.

"With the development of the electric vehicle market in the world along with the need for more environmentally friendly transportation, as well as Indonesia's enormous market potential and resources, we are currently faced with a golden opportunity to become a global partner of leading and world-class electric vehicle companies," Kaimuddin explained in his statement on Friday.

However, Kaimuddin emphasized that this golden opportunity will not last forever, because other countries are also rolling out the red carpet to welcome the electric car industry in their respective countries.

"And, we have to compete with them to attract these players. If we fail, we will only be a market, and not a producer," he emphasized.

Therefore, he also stated that millions of jobs from Indonesian automotive industry should not be jeopardized, just because the government is late to transform.

"Failure is not an option. For that, we must be able to anticipate the needs of these partners, to make it easier for them to make business strategy decisions going forward," Kaimuddin said.

He even explained about the Indonesian government's efforts to attract giant global electric car players to Indonesia. In fact, the government has already established relationships with several giant players that control half of global production.

According to a Bloomberg Energy Forum study, last year, the market share of electric car sales in the world reached 14 percent. This exceeds the 10 percent threshold, which is the tipping point for exponential growth of the electric car market.

The tipping point itself usually indicates a large growth spurt, especially for the period ahead.

"In order not to be left behind in the region, Indonesia has issued a Government Assistance program for the purchase of electric motorcycles and Government Borne VAT (PPN DTP) incentives for the purchase of electric cars and buses (BEV), in order to increase the affordability of electric vehicles that meet the requirements of the Domestic Component Level (TKDN)," he informed.

As known, Indonesia is currently the largest automotive market in the Southeast Asia region. The automotive industry is also one of the backbones of the Indonesian economy which accommodates around 1.5 million workers and contributes 4 percent of GDP.

Meanwhile, the export value of Indonesia's automotive industry will reach IDR 70 trillion by 2022.