A senior official from Indonesia’s Industry Ministry has announced that the country aims to start production of electric vehicles in 2022, Reuters reports. At the same time, the country is pushing for EV development and battery production facilities to create a downstream industry for nickel laterite ore, for which it has in abundance.

The raw material is used for production of lithium batteries. Companies such as Toyota and Hyundai have already expressed interest in building EV plants in Indonesia, Southeast Asia’s second-largest car production hub. The Japanese automaker has committed to invest US$2 billion (RM8.24 billion) in Indonesia over the next five years, part of which will be used to produce EVs, Industry Minister Airlangga Hartarto told the press.

“By 2022, production of electric-based vehicles should start,” said Harjanto, director general of metal, machinery, transportation and electronics at the Industry Ministry. He also said that the government has targeted EVs to reach a 20% share of national car production by 2025.


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As incentive, the government is offering tax holidays for companies producing EV batteries in Indonesia. “Recently there were a few battery companies which met the (industry) minister, but it is still an initial intention,” Harjanto said.

“They see Indonesia has big potential to develop electric-based products due to the availability of raw material,” he added. Several companies are currently developing smelters with high pressure acid leach (HPAL) technology to produce battery chemicals in Indonesia, including China’s Tsingshan Group.

Meanwhile, Harjanto also added that the government is in the midst of finalising the revision of a luxury car tax scheme to encourage the production of cars with lower carbon emissions.