Toyota’s $2 Billion Pledge Revs Up Indonesia’s Electric Car Push

(Bloomberg) -- Toyota Motor Corp. will lead 50 trillion rupiah ($3.6 billion) in investments that global carmakers have pledged to plow into Indonesia’s electric-vehicle program in the next five years, Industry Minister Airlangga Hartarto said.

The Japanese carmaker’s commitment -- it plans to spend $2 billion to build hybrid vehicle plants in Southeast Asia’s largest car market -- will help the country triple its total car exports to 1 million units per year by 2025, Hartarto told reporters Thursday on the sidelines of the Gaikindo Indonesia International Auto Show.

Hyundai Motor Co. plans to start producing conventional and electric cars in 2021, Jongkie Sugiarto, chairman at Indonesian Automotive Industry Association, said in an interview Thursday but declined to specify how much the South Korean carmaker will be investing.

Tesla Inc., Volkswagen AG and LG Chem Ltd. are among companies interested in building battery plants for electric vehicles in Indonesia, Coordinating Minister for Maritime Affairs Luhut Pandjaitan told reporters in Jakarta on Friday. Total investment could reach about $4 billion, he said.

The investment pledges will help Southeast Asia’s biggest economy ensure that electric cars constitute a quarter of its total production, equivalent to about 750,000 units annually, by 2030. Indonesia is relying on its abundant nickel reserves -- a key ingredient for making batteries -- and extra perks to carmakers which use more local components, to become a regional manufacturing hub.

Other Highlights

• BYD Co., and Anhui Jianghuai Automobile Group Corp. known as JAC Motors, are among those being wooed to build plants in Indonesia, Ridwan Djamaluddin, deputy for infrastructure at the Coordinating Ministry for Maritime Affairs said earlier this month. BYD and JAC declined to comment.
• “We told them that our automotive industrial center is in West Java but if they wish to be closer to the battery production area like Sulawesi, they can,” Djamaluddin said.
• A $4 billion lithium-ion battery manufacturing facility expected to be completed in 2020, will further improve the country’s attractiveness as nickel output rises, according to a July 12 Fitch Solutions report. State-owned PT Pertamina also plans to start producing batteries for vehicles.

--With assistance from Fathiya Dahrul, Tian Ying and Viriya Singgih.

To contact the reporters on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net;Eko Listiyorini in Jakarta at elistiyorini@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Thomas Kutty Abraham at tabraham4@bloomberg.net, Clarissa Batino, Bhuma Shrivastava

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