Indonesia is now looking to boost investment attraction to gain an edge in the race to become a hub for electric vehicle and electric vehicle battery production in Southeast Asia.
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| Indonesian President Joko Widodo during an inspection visit to the battery and electric vehicle manufacturing plant of PT Hyundai LG Indonesia-Green Power in Karawang, West Java, July 2024. (Source: theinvestor) |
In July, the country inaugurated its first electric vehicle battery factory in Southeast Asia. The factory is a joint venture between automaker Hyundai Motor and South Korean battery maker LG Energy Solution with a total investment of 1.1 billion USD and is located in West Java province.
Speaking at the ceremony, then-President Joko Widodo of Indonesia affirmed that such investments would help the archipelago nation become an important link in the electric vehicle supply chain of the region as well as the world.
Fransiscus Soerjopranoto, CEO of Hyundai Motors Indonesia, said the new plant will help Indonesia become a key player in the electric vehicle supply chain in Southeast Asia. Although Indonesia aims to become one of the world’s top three electric vehicle battery producers in the near future, investment in the sector remains modest.
Indonesia has the world’s largest reserves of nickel, along with iron, copper and bauxite, which are key ingredients for electric vehicle batteries. However, the country still has to import raw materials for the new plant, including processed nickel, from South Korea and China due to a lack of related industries.
The Indonesian government has announced a number of incentives to boost the domestic EV market, including tax breaks to boost sales amid competition from imported EVs. However, a global battery glut could make it difficult for Indonesia to attract more investment, said Putra Adhiguna, executive director of the Energy Transition Research Institute.
Indonesia faces both great opportunities and challenges in developing its electric vehicle industry. Investment incentives, along with abundant natural resources, can help the country assert its position in the regional electric vehicle market. However, to realize its goal of becoming an electric vehicle manufacturing hub, Indonesia needs to continue to improve its infrastructure and increase its domestic production capacity.
Source: https://baoquocte.vn/khanh-thanh-nha-may-pin-xe-dien-indonesia-buoc-vao-cuoc-dua-toan-cau-291563.html
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