Indonesia to decide on electric car policy with Hyundai keen to invest in a plant in the country

Indonesia said Hyundai is keen on expanding its electric car production base to the country as it wants to take advantage of the recently built integrated industrial estate in nickel-rich Central Sulawesi.
Indonesia said Hyundai is keen on expanding its electric car production base to the country as it wants to take advantage of the recently built integrated industrial estate in nickel-rich Central Sulawesi.PHOTO: REUTERS

JAKARTA - Indonesia is poised to issue its first regulation on electric vehicles on Monday (Jan 14) with officials from Hyundai due to arrive in the country at the end of the month (Jan) to discuss investment plans for a green vehicle project.

President Joko Widodo is meeting his ministers on Monday to finalise the regulations which will encourage sales of electric cars as well as the development of a domestic industry for such vehicles.

Earlier, a source told The Straits Times that a debate was raging among ministers on whether Indonesia should adopt a wholly electric vehicle regime from the outset, or start first with a hybrid one that does not require charging stations as such vehicles are powered by conventional internal combustion engines.

Indonesia's maritime affairs coordinating minister Luhut Pandjaitan told a media briefing on Monday that Indonesia planned to start with electric motorcycles - possibly as early as this year (2019). The scheme would then be expanded to include public buses before private cars.

He did not give a time frame for public buses and private cars.

The government has thrown its support behind green vehicles in an effort to reduce the country's reliance on imports of fossil fuels and turn towards tapping on its abundant nickel reserves, a key material for making lithium-ion batteries.

Last week, Mr Luhut witnessed the ground-breaking of a planned US$700 million (S$962 million) joint venture project to develop a nickel-cobalt project in Indonesia.

 

The partners included Indonesia's Morowali Industrial Park, the Chinese battery recycling company, GEM, and Japan's Hanwa, which trades in steel, metals and alloys.

"The construction will take 16 months. By the middle of next year, we will have a plant that can supply main raw materials to make lithium batteries," Mr Luhut said.

Tesla, the American carmaker which has sold about 143,000 electric cars, relies predominantly on nickel in the form of nickel sulphide as the important cathode component in its car batteries.

Nickel makes up 80 per cent of Tesla's Model S car battery components. Cobalt makes up 15 per cent and aluminium takes up the remaining five per cent.

Hyundai Motor is keen on expanding its electric car production base to Indonesia as it is keen to take advantage of the recently built integrated industrial estate in Morowali in nickel-rich Central Sulawesi province, said Mr Luhut.

"Hyundai is very eager and sees Indonesia as a good place for one of their production bases," he said. "Soon we will be signing the IA-CEPA, giving us a good position to export there." Mr Luhut was referring to the strategic Indonesia-Australia Comprehensive Economic Partnership Agreement.