The Indonesian automotive industry has a production capacity of more than 2 million vehicles per year and is able to absorb 1.5 million workers.
Coordinating Minister for Economic Affairs Airlangga Hartarto said that currently the Indonesian automotive industry is supported by 25 car manufacturing companies.
“Currently, the strength of the automotive industry in Indonesia is supported by 26 four-wheeled motor vehicle industry companies,” said Coordinating Minister Airlangga at the Inbuyer Electric Vehicle (EV) Expo 2023 in Jakarta, Tuesday (28/11/2023).
Airlangga emphasized that the government is focusing on encouraging the development of the electric vehicle (EV) ecosystem. This is based on a commitment to reduce carbon emissions by 358 million tons of CO2e by 2023.
According to him, the development of the Indonesian electric vehicle industry is currently gaining good momentum and has been supported by the condition of the country which is the largest producer of nickel metal minerals in the world as EV battery raw materials.
“Development of electric vehicles in Indonesia is important because investment continues to increase and sales of electric motorbikes have increased,” said Airlangga.
To encourage industry, the government has issued several incentives including incentives for government assistance for new 2-wheelers and conversions worth IDR 7 million.
Then in terms of Value Added Tax borne by the Government (VAT DTP), electric cars and electric buses with a TKDN value of at least 40 percent will be given a VAT incentive of 10 percent. Meanwhile, electric cars and electric buses with a TKDN of 20-40 percent are given a VAT incentive of 5 percent.
Apart from that, currently Indonesian micro, small and medium enterprises (MSMEs) have collaborated with the Busan Economic Promotion Agency (BEPA), South Korea.
The scope of this collaboration is the Research and Development Center (RnD Technology Center) for electric vehicles. It is hoped that the cooperation contained in the Memorandum of Understanding (MoU) will be an important point in increasing the role of Indonesian MSMEs/IKM in the EV ecosystem.
“Hopefully this event will run smoothly, can spur and navigate Indonesian MSMEs to be more proactive and progressive in improving performance and responding to every existing challenge,” he said. Meanwhile, the Indonesian economy showed resilience amidst various global risks with positive growth of 4.94 percent (yoy) in the third quarter of 2023.
One of these achievements was supported by the processing industry sector which was able to grow by 5.20 percent (yoy) with a contribution of 18.74 percent to Gross Domestic Product (GDP).
Then, the Transportation Equipment Industry became one of the industrial sub-sectors that grew positively by 7.31 percent in the third quarter of 2023.