Indonesia steps up incentives to attract Global Electric Vehicle Giants

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Indonesia is planning to implement a new set of incentives aimed at drawing investment from leading global electric vehicle (EV) manufacturers. The Southeast Asian country is actively engaged in discussions with key EV players such as Tesla and BYD, a detail unveiled by Luhut Pandjaitan, Coordinating Minister of Maritime Affairs and Natural Resources, at a recent nickel industry conference hosted by CNBC Indonesia.

The minister disclosed that the forthcoming incentives would be benchmarked against those offered by other regional competitors, such as Thailand and Vietnam. However, he did not elaborate on the specific details of the proposed incentives.

Indonesia has been making concerted efforts to attract investment from EV manufacturers. The country is leveraging its world-leading nickel reserves, a crucial element in the production of EV batteries, as a significant part of its offer. Despite these efforts, the country’s ambitious plans have not been without challenges. Notably, China’s BYD has opted to invest in Thailand, which is the established automotive hub in the region.

“We are going to finalize incentives that we are going to give to any EV investment in Indonesia,” Luhut stated, adding that these plans are pending approval from President Joko Widodo.

As part of the ongoing efforts to secure foreign investment, Luhut is scheduled to meet with executives from BYD in Chengdu, China, on Thursday. A follow-up meeting with Tesla’s CEO Elon Musk is also slated for August 3 in California, United States.

Indonesia has long held ambitions of attracting Tesla to establish an Asian production hub within its borders. This news comes amid ongoing talks between Tesla and Indian officials about the possibility of setting up an EV factory in India.

While Indonesia is hopeful of securing these significant investments, the success of the incentives and their subsequent impact on the country’s EV industry remains to be seen. The outcome could potentially reshape the regional landscape of EV manufacturing, and significantly enhance Indonesia’s position in the global EV market.

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