Jokowi optimistic that Indonesia will become major player in EV industry, expert: Develop domestic market first

Jakarta

Jokowi expressed Indonesia's desire to become a major player in the global electric vehicle industry by inaugurating the PT. Hyundai-LG Indonesia (HLI) Green Power battery and electric vehicle ecosystem in Karawang Regency, West Java, on Wednesday (3/7). The president called the plant a battery cell facility. electric vehicle (EV) is the first and largest in Southeast Asia.

I really appreciate the investment that has been made by Hyundai and LG and the decision to build the largest electric battery cell (factory) in Southeast Asia, this is the first one and now it is completed, it is already in production, we hope that the capacity will increase every year and then we can enter the global supply chain, the goal is there, Jokowi said.

Jokowi's belief is not without reason, as according to him, Indonesia has all the necessary elements to build and develop an electric vehicle ecosystem such as mineral raw materials, smelters, precursors and others.

I am sure that we can win our competition with other countries because the mines are here, the nickel and bauxite are here, the copper is here. There is a smelter, cathodes and precursors, then batteries for electric vehicles, then the car factory is there, integrated into an ecosystem of electric cars. Who can stop us if the conditions are so competitive?, he stressed.

This 319,000 square meter electric battery cell plant is a joint venture (joint venture) between Hyundai Motor Group and LG Energy Solution with an investment value of IDR 160 trillion. By the first half of 2024, the plant's annual capacity will reach 10 GWh of battery cells, enough for 150,000 electric vehicles.

Luhut: With technological updates, Indonesia is ready to become a key player

This desire to become a key player in the electric vehicle industry was also expressed by the Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, who was even ready to update the existing technology.

Indonesia is poised to become a key player in the global electric vehicle supply chain, from upstream to downstream, with an integrated ecosystem involving international players. “This strategic step will not only improve our economy, but also create thousands of jobs, encourage innovation and skill development of our workforce,” Luhut said.

According to him, the steps taken by the Indonesian government to develop the electric vehicle ecosystem are proof of its strong commitment to innovation, environmental stewardship, job creation and economic growth.

Today marks an important milestone in Indonesia's journey towards sustainable development and technological progress by inaugurating the lithium battery and electric vehicle ecosystem in Indonesia, he added.

Target of 600,000 electric car batteries by 2030

Indonesia aims to have a production capacity of 600,000 battery electric vehicles (BEVs) by 2030, so Kona Electric's production of 50,000 units per year will significantly increase Indonesia's production capacity. It is estimated that this production will reduce CO2 emissions by approximately 160,000 tons per year, reduce fuel imports by 45 million liters per year, and save up to IDR 131 billion in fuel subsidies, and will increase with the number of vehicles on the road.

Experts call for expanding the internal market sooner

Asked by VOA, an economist from the University of Indonesia, Josua Pardede, confirmed that with its various potentials, Indonesia could become a major player in the global electric vehicle supply chain and industry. In addition, downstream exploitation of mineral raw materials such as nickel could become another engine of economic growth for Indonesia in the future.

However, Josua suggested that before entering the global market, it would be a good idea for the government to first expand its domestic market. Indeed, so far, the market share of electric vehicle sales in the country still stands at around three percent.

If we talk price still relatively expensive. If we talk request and the level of people's purchasing power is even more oriented towards the LCGC segment, which costs between IDR 200 and 300 million. This means how to improve the economy improvementFirst, it comes from the EV industry so that the price of this electric car can be as economical as that of the LCGC because in the end, if the proposed EV is still expensive, it is because the demand is still not there. And despite the commitment of this government online with the program net zero emissions government in 2060, Josua said.

Apart from this, Josua hopes that the inauguration of the electric vehicle battery cell factory on Wednesday (3/7) will also be followed by investments in other electric vehicle ecosystems, as so far, the endorsements made, especially those related to electric vehicles, have still not had a significant direct impact on society.

What is certain is that we hope that the downstream process from start to finishAnything can happen within the country, so there will be an impact multiplier effect on the absorption of work, because the problem is that there are only two of us stage For example, we don't get much from raw materials. That means that only export performance is high, but does the local population feel the same? That doesn't fit into the context of environmental issues. But it does mean down plating effectthe community has not yet felt it, because the process is still happening outside, and from start to finish-This did not happen in Indonesia, he concluded. [gi/em]