JAKARTA: Ford Motor Co is expected to build an electric vehicle (EV) manufacturing plant in Indonesia next year, says an Industry Ministry official.
Deputy Industry Minister Faisol Riza said he was confident about the development of the country’s EV industry and that he hoped more locally produced EVs would appear on the market.
“Ford has promised to realise its factory and investment in Indonesia by next year,” the minister said at an event in Jakarta.
“It looks like some of the global automobile manufacturers that were once here and then disappeared will also be coming back,” Faisol said, alluding to Ford’s decision to exit the Indonesian market in 2016.
Earlier in November, state-owned enterprises Minister Erick Thohir said talks had been ongoing between government officials and global automakers, including Ford and Germany’s Volkswagen, as quoted by CNN Indonesia.
President Prabowo Subianto had made the talks a priority during his November overseas tour, Erick said.
Erick’s presentation revealed plans for a US$6.5bil investment by Vale in a collaboration with Ford and VW for nickel processing plants in South-East Sulawesi and Central Sulawesi.
Ford’s partnership in the country involves PT Vale Indonesia and China’s Zhejiang Huayou Cobalt in a US$4.5bil nickel processing project, Reuters reported last year.
Indonesia has sought to position itself as a critical player in the global EV supply chain through its nickel reserves, a key material in many EV batteries.
Faisol went on to say that the government had focused on market creation in the country over the past years and added that the strategy “was set to yield significant results by the end of 2026”.
“We are now reaping the benefits of policies we implemented a few years ago,” Faisol said.
“We aim for all manufacturers to establish factories in Indonesia because of their high social and economic impact, particularly in job creation.”
The deputy minister highlighted the government’s ongoing efforts to boost local production, noting that several manufacturers, including local player Polytron, were already producing electric two-wheelers locally and were aiming for electric four-wheeler manufacturing.
Chinese EV companies, including BYD, Wuling, Chery and Neta, have taken significant shares of the electric car market in Indonesia since early this year, presenting a challenge to the existing player, South Korea’s Hyundai.
Faisol said it would be necessary to increase the local content requirements for automotive production stipulated in ministry regulations, claiming this could lead to “more global players coming into the country”.
Faisol outlined an ambitious local content target for the EV industry of 40% by the end of 2026. The ministry would increase it to 60% by the end of 2029 and 80% by the end of 2030.
“We are committed to building an EV ecosystem that meets these local content targets,” he said.
“This is crucial because it not only stimulates industrial growth but also creates significant social and economic benefits, including jobs.”
The plan to increase the local content of EVs, however, has been widely criticised by foreign chambers of commerce and companies seeking to invest in Indonesia.
RMA Indonesia, the authorised Ford distributor in the country, told The Jakarta Post last Saturday, the company remained fully committed to the Indonesian market and would continue to evaluate opportunities to bring the best mobility solutions to local consumers.
“Ford and RMA Indonesia are also always looking for opportunities to deliver the right vehicles for each market, including EVs, by maximising existing resources and infrastructure,” the company said. — The Jakarta Post/ANN
