JAKARTA: Japanese automakers and suppliers have expressed concern over Indonesia’s local content requirements for electric vehicles (EVs) as the country prepares to raise the threshold to 60% next year as part of a push to deepen its EV industry.
The issue was raised during a meeting between Japanese industry executives and government officials in Nagoya, Japan, on Saturday, where they discussed licensing, financing for small and medium-sized suppliers and certification of local content rules as the country shifts toward EVs, according to the Office of the Coordinating Economy Minister.
“The government welcomes all the feedback and is committed to refining the policies through concrete measures, including addressing ongoing investment barriers,” the office’s secretary, Susiwijono Moegiarso, said in a press release.
The meeting brought together executives from PT Toyota Motor Manufacturing Indonesia, PT Denso Indonesia, PT Aisin Indonesia and PT Advics Manufacturing Indonesia.
Indonesia will raise its local content requirement, TKDN, for locally produced battery electric four and two-wheelers to 60% from 40% on Jan 1, 2027, before raising it to 80% in 2030 under Industry Ministry Regulation No 6/2022.
Indonesia has long relied on local-content rules to protect domestic industries while using the requirements to encourage manufacturers to build more of their supply chains in the country.
The 40% threshold was designed to help create an EV market and attract manufacturing investment while the higher thresholds are meant to push firms to source more of their parts in the domestic market.
The integration of EV manufacturers with domestic local supply chains remains limited despite “many companies” having reported that they reached the levels mandated by the government, a source said. — The Jakarta Post/ANN
