Chinese firms help Indonesia's auto market transition to new energy sources

Image not related to text

Recently, Chinese car company BYD held a new car launch in Indonesia's capital Jakarta, launching three models, marking its official entry into Indonesia's new energy passenger car market. Luhut, Indonesia's Minister of Marine and Investment Coordination, said, "The entry of BYD's new energy vehicles into the Indonesian market can make big cities like Jakarta cleaner, make our lives healthier, and drive the development of Indonesia's electric vehicle industry."

In recent years, the Indonesian government has actively introduced policies to encourage the development of the electric vehicle industry. The Indonesian government has incorporated the expansion of electric vehicle production into the 2011-2025 Master Plan for Indonesia's Economic Development and proposed the development of electric vehicle supporting infrastructure in the 2020-2024 Medium-Term National Development Plan.Starting from 2019, the Indonesian government has introduced a series of incentives for electric vehicle manufacturers, transportation companies and consumers, including reducing import tariffs for related production materials, providing subsidies for consumers to purchase electric vehicles, and encouraging the development of electric vehicles for consumers. consumers, including lowering import tariffs on related production materials, providing tax exemptions for EV companies, subsidizing EV purchases for consumers, and encouraging the retrofitting of fuel vehicles with electric propulsion systems, etc. In April 2023, the Indonesian government also significantly reduced the VAT on EVs from 11% to 1%, driving down the price of EVs on sale significantly. The price of electric vehicles on sale will be significantly reduced.

As preferential policies for Indonesia's electric vehicle industry are gradually coming to fruition, more and more Chinese new energy vehicle companies, battery manufacturers and others are actively expanding their investments in Indonesia and expanding the local market. As early as October 2018, BYD's first electric bus entered Indonesia, and now there are many BYD electric buses traveling in the streets and alleys of Jakarta.2023 In May, BYD and Indonesia's Ministry of Ocean and Investment Coordination signed a memorandum of understanding to explore the development of electric vehicle industry in Indonesia. BYD plans to invest US$1.3 billion in Indonesia to build a plant with an annual capacity of 150,000 vehicles and establish a sales network with 50 dealerships across the country by the end of 2024, according to the report. Luhut said BYD's investment in the Indonesian market will help promote Indonesia's energy transition and economic growth, and help the country combat climate change.

Chinese car company Wuling has also performed very brightly in Indonesia's electric vehicle market. Wuling is the first Chinese automaker to enter the Indonesian market and build a factory there, and has established 150 local sales and service outlets, basically covering Indonesia's major cities and regions.2022, Wuling launched a small electric car in Indonesia, which is highly favored by consumers due to its high cost performance. Local drivers believe that this car not only has a favorable price, but also has a compact model and low energy consumption, which makes it especially easy to drive on narrow urban roads.

Leveraging its innovative strengths in electric vehicles, Ne Zha Auto is also accelerating its expansion into Indonesia. In October 2023, Ne Zha Auto introduced its smart electric vehicles to Indonesia and signed a cooperation agreement with a leading local automaker, with plans to begin localized production in the second quarter of 2024," said Sun Guang, Assistant President and Executive Vice President of Overseas Business Unit of Ne Zha Auto. Sun Guang, assistant president and executive vice president of Ne Zha Auto's overseas business division, told the newspaper that the Indonesian government supports the development of the electric vehicle industry and has launched a series of promotional measures to encourage people to buy electric vehicles, and that Indonesia's electric vehicle market has great potential, "Indonesia has become an important destination for Ne Zha Auto's 'Going Out! Indonesia has become an important destination for Nezha Motors to 'go out'".

Indonesia's Minister of Industry Agus Gumiwang said that Indonesia wants to become a globally competitive regional production center for electric vehicles, and cooperation with China is in line with Indonesia's development plan. He emphasized that China is one of the world's largest producers of electric vehicles, and that Indonesia is ready to cooperate with China to develop the electric vehicle ecosystem, and that "related cooperation will also help ASEAN to achieve the goal of green and sustainable development."