Tuesday 28 November 2023

Indonesia has 26 four-wheeled vehicle companies, absorption capacity reaches 1.5 million workers


The era of electric vehicles or Electric Vehicles (EV) is at hand, the Government has announced a commitment to reduce carbon emissions by 358 million tonnes of carbon dioxide or CO2 by 2023.

Quoted from the Antara news agency, at the Electric Vehicle (EV) Inbuyer event Expo 2023 in Jakarta, Tuesday (28/11/2023), Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized that the Government is focusing on encouraging the development of the EV ecosystem.

He explained that currently the Indonesian automotive industry has a production capacity of more than 2 million vehicles per year.

“Currently, the strength of the automotive industry in Indonesia is supported by 26 four-wheeled motor vehicle industry companies, their production capacity is above 2 million and this industry absorbs 1.5 million workers,” he explained.

He said that the development of the EV industry in the country is currently at a good momentum because it has been supported by the condition of the country which is the world’s largest producer of nickel metal minerals as raw material for EV batteries.

President Joko Widodo (right) listens to an explanation of the process of making cell batteries when inaugurating the laying of the first stone for the construction of an electric car battery factory in Karawang, West Java, Wednesday (15/9/2021). [Antara/Setpres Media Press Bureau/Laily Rachev] “The development of electric vehicles in Indonesia is important because investment continues to increase and sales of electric motorbikes have increased,” continued Airlangga Hartarto.

For the EV industry to grow, the government has issued several incentives. These include government assistance incentives for new two-wheelers and conversions worth IDR 7 million.

Then regarding the Value Added Tax borne by the Government (VAT DTP), for electric cars and electric buses with a TKDN value of at least 40 percent, a VAT incentive of 10 percent will be given.

And for electric cars and electric buses with a TKDN of 20-40 percent, a VAT incentive of 5 percent is given.

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 to increase 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,” explained the Coordinating Minister for Economic Affairs.

Meanwhile, the Indonesian economy is showing resilience amidst various global risks by growing positive 4.94 percent (yoy) in the third quarter of 2023.

This achievement was partly 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.

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