Towards a Golden Indonesia, the Target of Four- and Two-Wheeled Electric Vehicles Continues to be Pushed, Even Foreign Partners Accelerate TKDN

Towards the weekend, Friday (22/12/2023), a virtual 2023 Performance Evaluation Towards a Golden Indonesia was held in Jakarta. On this occasion, Rachmat Kaimuddin, Deputy for Infrastructure and Transportation Coordination at the Coordinating Ministry for Maritime Affairs and Fisheries, said that currently there are still around tens of thousands of electric vehicles in Indonesia.

For this reason, the Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves) has set a target for the number of electric vehicles, both two-wheeled and four-wheeled , that will circulate and operate in Indonesia by 2030 to reach 15 million units.

"The President has said that approximately 10 percent of the population (electric vehicles) are needed by 2030 or the calculation is around 2 million cars and 13 million motorbikes," explained Rachmat Kaimuddin, as quoted by the Antara news agency .

"There is still quite a long way to go, but it is very promising to push because we still have about seven years left, the government has given some encouragement," he continued.

In realizing this ecosystem, Rachmat Kaimuddin stated that there are three things that need to be considered. That is:

Reliable, capable vehicle choices, both in terms of performance and so on.

The price of electric vehicles also needs to be affordable for Indonesian people.

A complete and capable infrastructure ecosystem is required.

According to Rachmat Kaimuddin, he said the government is carrying out several programs to increase electric vehicles in Indonesia.

First, the start of the vehicle transition from conventional to electric. Currently, around 17 motorbike factories in Indonesia have implemented a Domestic Component Level ( TKDN ) of 40 percent. Meanwhile, for cars, there are only two manufacturers, namely from China and South Korea.

“And there are around 30 products. So there are quite a lot of motorbikes, you can even see that the number one motorbike manufacturer in Indonesia, namely PT Astra Honda Motor, also has this product. "Continue, four-wheeled vehicle companies that have products with Domestic Component Level or TKDN reaching 40 percent, there are two manufacturers, one from China and one from South Korea," he continued.

Second, the Government has also issued a regulation, Presidential Regulation (Perpres) Number 79 of 2023 concerning Amendments to Presidential Regulation Number 55 of 2019 concerning the Acceleration of the Battery Electric Vehicle Program for Road Transportation.

This presidential regulation provides incentives in the form of export quotas, import duty exemptions and PPnBM for products exported until 2025. In this way, the government hopes to create an ecosystem that is conducive to the development of electric motorized vehicles.

The Presidential Decree also requires that if electric vehicle manufacturers import until 2025, they must commit to building production capacity with a production volume that is at least equal to the number of vehicles imported in 2027.

"And what they produce must meet TKDN standards according to the Indonesian industrial roadmap, namely 40 percent until 2026, and 60 percent until 2027," he said.

Third, electric vehicle manufacturers must provide commitments and guarantees so that if they do not fulfill these production commitments they will be subject to sanctions equal to the amount of the unfulfilled commitment.

"So, for example, if they import 1,000 until 2025, they have to produce 1,000 until 2027. If they only produce 500, for example, then for the remaining 500 they have to return the incentives they have received," said Rachmat Kaimuddin.

On the same occasion, he explained the results of his visit to China to meet with several factories that wanted to invest in four-wheeled electric vehicles in Indonesia.

"One of the partners we met in China in May accelerated production by one year. So, they said they would import first, then continue production in December 2024. However, in December 2023 they had TKDN above 40 percent," he said.

"Apparently the efforts we offered from the government were welcomed by manufacturers. "Of course we hope that apart from China we will also get lots of inquiries from various other countries," explained Rachmat Kaimuddin.

He said that the positive response from China in particular had shown the great potential of the electric vehicle ecosystem in Indonesia.