Electric Car Manufacturer Investment Benefits Industrial Area Business

March 24, 2024, 11.38 PM | Reporter: Dimas Andi, Rashif Usman

ILUSTRASI. Many visitors observe electric cars on display at the 2024 Indonesia International Motor Show (IIMS) at JIExpo Kemayoran, Jakarta, Monday (19/2/2024). The government is committed to continuing to support the development of the Battery-Based Electric Motor Vehicle (KBLBB) ecosystem by providing various tax incentives, from import duty incentives on imports of 4-wheeled KBLBB of zero percent both in whole (CBU) and completely decomposed (CKD) to Sales Tax incentives on Luxury Goods (PPnBM) for four-wheeled KBLBB. BETWEEN PHOTOS/Aditya Pradana Putra.

ELECTRIC VEHICLE - JAKARTA. Several global automotive manufacturers are actively investing in developing an electric car ecosystem in Indonesia this year. This certainly has a positive impact on business people in the industrial area.

The Chairman of the Indonesian Industrial Estate Association (HKI), Sanny Iskandar, said that the industrial area has taken a positive response to the entry of electric vehicles, as it stimulates supporting industries from upstream to downstream, thus being able to develop their business in several areas.

"The proximity of the manufacturing industry to each supplier can certainly create logistic cost efficiency for the industry itself," Sanny told Kontan on Friday (22/3) night.

Sanny explained that so far, several electric car industries have been operating within the industrial area and have already produced electric vehicles. According to him, the land requirement for the electric vehicle (EV) industry is quite large.

"The EV industry also provides a multiplier effect for other industries such as the need for interiors and other small spare parts," he said.

This year, Sanny stated that industrial estate managers are still optimistic that the demand for industrial land will continue to increase. This optimism is not only driven by the automotive industry but also the FMCG (Fast Moving Consumer Goods) sector and the data center industry also helps boost the demand for industrial area land.

"This optimism factor is supported by the growth of the manufacturing industry, including automotive and FMCG, as well as the increasing demand for land for data centers driven by digital transformation," he explained.

In previous Kontan news, several automotive manufacturers are aggressively expanding their business by building electric car factories in Indonesia.

Vietnamese automotive manufacturer, VinFast, has confirmed its initial investment in Indonesia of US$ 200 million to build an electric car factory with a capacity of 50,000 units per year.

A new player from China, Build Your Dreams (BYD) also plans to invest in developing an electric car ecosystem in Indonesia. BYD targets to start the groundbreaking and construction of the electric car factory this year. BYD's investment in Indonesia could reach US$ 1.3 billion.

Another Chinese manufacturer, PT Chery Sales Indonesia, has started producing the Chery Omoda E5 electric car using the factory owned by PT Handal Indonesia Motor (HIM) in Pondok Ungu, Bekasi with a capacity of 600 units per month. Unfortunately, Chery's investment needs to increase the production capacity of its electric cars were not mentioned.

South Korean manufacturer, Hyundai, is developing an electric car ecosystem in Indonesia from upstream to downstream. They invested US$ 1.55 billion to build a factory in Cikarang with a capacity of 150,000 units - 250,000 units per year.