This Company Will Be an Investor in the Indonesian Electric Vehicle Industry

In mid-September 2022, Indonesian President Jokowi issued Presidential Instruction (Inpres) No. 7 of 2022 to encourage the use of electric vehicles within government institutions.

This instruction includes an order to the Ministry of Industry to "accelerate the development of core and supporting components for the battery-based electric vehicle (BEV) industry".

In line with this instruction, several large companies are planning to invest in the development of the electric vehicle industry in Indonesia, namely LG, CATL, and Foxconn.

This news was conveyed by Andria Buchara, Head of Promotion at the Investment Ministry/BKPM, during a public discussion held virtually by the Institute for Development of Economics and Finance (INDEF) on April 20, 2022.

"Some projects we highlight as strategic are the integrated battery industry (in collaboration) with LG from South Korea, CATL from China, and Foxconn from Taiwan," said Andria during the event (20/4/2022).

According to Andria's presentation, the following are the investment plans of LG, CATL, and Foxconn in Indonesia as of April 2022:

* LG: Integrated battery industry worth US$9.8 billion
* CATL: Integrated battery industry worth US$5.2 billion
* Foxconn: Electric battery industry, electric vehicle industry, and supporting industries worth US$8 billion

"The agreement to secure raw materials for the LG and CATL projects, which is a concern for investors, was signed last week with the Ministry of SOEs and MIND ID," said Andria (20/4/2022).

However, Andria Buchara stated that several stages still need to be completed to realize these investment projects.

"Our concern is the downstream processing; we don't want these companies to only extract raw materials, but the added value in the downstream sector is not developed," said Andria.

"Electric vehicle batteries, as the most expensive component, are expected to see a significant price drop, thus accelerating the development of electric cars and motorcycles and their ecosystem," he concluded.