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Monday, 20 September 2021 08:43

To Grow National Electric Vehicle Industry

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Indonesian President Joko Widodo inaugurated the groundbreaking for the construction of an electric vehicle battery factory in Karawang, West Java last Wednesday (15/9). The project worth US$1.1 billion or equivalent to Rp 15.6 trillion will be the first such a battery factory, not only in Indonesia, but also in ASEAN region or Southeast Asia.

President Joko Widodo in his speech said that the glorious era of raw material commodities is over. Therefore, Indonesia must have the courage to change its economic structure, which has been commodity-based, to enter into down-streaming and industrialization. Thus,  Indonesia can become a strong industrial country based on the development of technological innovation.

By accelerating the revitalization of the processing industry and by removing dependence on imported products or imports from exports of raw materials, Indonesia will be able to obtain higher economic added-value.

According to President Joko Widodo, Indonesia has the largest nickel reserves (an important mineral for battery products) in the world. With this extraordinary potential, in the next 3-4 years, through good management, Indonesia is believed to be a major producer of nickel-based finished goods, including lithium batteries, electric batteries, and electric vehicle batteries. If nickel is processed into cell batteries, its value can increase 6-7 times. In fact, if it becomes an electric car, the added-value will increase even more to 11 times.

To attract public interest in switching from oil-fueled vehicles to electric vehicles, the Indonesian Government certainly needs to conduct a massive campaign about the benefits of using this type of vehicle. The government should also issue a policy that will make the price of electric vehicles inexpensive. Based on the research of the Association of Indonesian Automotive Industries, it was found that the price of electric vehicles in general is still above Rp 450 million per unit, while the purchasing power of Indonesian people is around Rp 300 million per unit. In addition, the government must also provide sufficient electric vehicle battery charging stations so that people feel confident that they will not face difficulties when they already have an electric vehicle. 

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