Indonesia has enacted Presidential Decree No. 55/2019 to prioritize the development of the domestic EV industry, reaffirming the nation's commitment to reducing greenhouse gas emissions and harnessing clean energy sources. With government support and significant global investments from major automotive players such as Toyota, Hyundai, and Honda, Indonesia is poised to become a strong EV hub in the region. Strategic plans include establishing a domestic EV battery supply chain and leveraging Indonesia's abundant nickel reserves to strengthen its position in the EV industry.

The recent formation of the Indonesia Battery Corporation (IBC), facilitated by a shareholder agreement signed by key stakeholders, marks a significant milestone in managing the battery industry ecosystem, particularly for EVs. With a roadmap extending to 2026, Indonesia aims to commence EV production as soon as 2022, with the ambitious goal of achieving 100 percent EV adoption in the new capital city by 2026.

Despite its strong ambitions, Indonesia faces challenges such as limited domestic EV demand, regional competition, and geopolitical dynamics. To succeed, the country needs to take strategic steps, including setting clear goals, developing infrastructure, attracting investments, and fostering innovation ecosystems. A coordinated approach involving technology development and human resources, supported by government backing, will be key to ensuring Indonesia's success in realizing its EV vision.

 

Source: KPMG Indonesia