Trends of electric car will come and Indonesia has came at the right time and place . Indonesia has the largest nickel reserves in the world, which is one of the raw materials for making electric car batteries. The amount is approximately 21 million tons or 25% of the world’s nickel reserves. Investments began to arrive. Last December, the Indonesian government signed a cooperation agreement with a South Korean company, LG Energy Solution, for an investment of Rp 130 trillion for mining raw materials and manufacturing battery cells. For this reason, the government must be able to take advantage of this opportunity to transform the manufacturing industry. This moment also needs to be maintained and followed up with policies that facilitate business and make Indonesia a part of Global Value Chain or global supply chain, when components of Indonesian production are used in other countries. (TheConversation, 2021)
As stated on the website of the Ministry of Industry of the Republic of Indonesia, Indonesia is targeting the production of 400 thousand units of electric vehicles in 2025 and 5.7 million units in 2035. To prepare for this, the government has formulated a number of regulations derived from Law no. 30 of 2007 concerning Energy. In 2017, the government issued Presidential Regulation No. 22 of 2017 concerning the General National Energy Plan, which regulates policies related to KBL development.
In addition, the government also issued Presidential Regulation no. 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program for Road Transportation. The regulation outlines the steps that the government plans to promote and accelerate the implementation of the battery-based electric motor vehicle (KBL BB) program in Indonesia. This regulation stipulates five main directions to accelerate the program such as:
- Accelerating the development of the domestic KBL BB industry
- providing incentives
- providing electricity charging station infrastructure and regulations for charging electricity rates for KBL BB
- fulfilling technical requirements for KBL BB
- protecting the environment.
Earlier this year, four SOEs, PLN, Antam, Inalum and Pertamina, established the Indonesia Battery Corporation (IBC) to help the government add value from strategic minerals. IBC opens the door for cooperation in profit-based downstream projects , including market access and financial support to expand mineral production from the company’s reserves. Several companies have introduced KBL to the commercial sector and plan to continue in the future. Local taxi company Bluebird is already using electric motorized vehicles in its fleet. This vehicle can cover a distance of up to 400 km on a single charge. Transportation booking service company Grab has also launched its first electric car fleet in early 2020, with a pilot service of 50 KBL cars based at Soekarno-Hatta International Airport. This industry has also attracted the attention of leading international automotive industry players. PT Electric Circle Optimum, a Hong Kong-based company, is also investing in this sector, for two-wheeled, three-wheeled, four-wheeled vehicles, and more. The company has also established a factory in Surabaya, East Java.
The Indonesian government provides investment incentive opportunities for potential investors in this sector. The process of testing vehicles and the process of obtaining permits for foreign workers from these companies will be easier. There are also many fiscal incentives available, from tax benefits and holidays to the possibility of tax deductions. The government also plans to build green lanes along public roads. It seems that the path to a brighter future and better investment for KBL has now begun to be built. (BKPM, 2021)
BKPM. (2021, December 30). Exploring the Future with Electric Cars. Retrieved from the Ministry of Investment/BKPM: https://www.bkpm.go.id/id/publikasi/detail/berita/menjelajah-masa- Depan-dengan-mobil-listrik
TheConversation. (2021, January 15). Why the trend of electric vehicles is the transformation momentum of the Indonesian automotive industry . Retrieved from theconversation.com: https://theconversation.com/why-tren-kendaraan-listrik-dalam-momentum-transformation-industri-otomotif-indonesia-152958