Investment Talks with American Electric Vehicle Producer Progressing Well: Minister

TEMPO.CO, Jakarta - Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan has said that negotiations with an American electric car manufacturer regarding investment in Indonesia’s electric vehicle (EV) ecosystem are progressing well.

However, he did not provide further details on the progress of the talks as the Indonesian government is still bound by a non-disclosure agreement (NDA) with the US company.

"Indeed, currently, we only have an NDA (with the company), but I think we have had great (negotiation) progress," he said during a doorstop interview with the media at the launch of the “Government Assistance Policy for Battery-Based Electric Vehicle” on Monday evening.

On the occasion, the coordinating minister and a number of officials from related ministries announced that the government will provide value-added tax (VAT) incentives of up to 10 percent this year on the purchase of electric cars and buses.

Pandjaitan said that the provision of government assistance and fiscal incentives for the purchase of EVs is expected to attract investment from foreign vehicle manufacturers to Indonesia.

Still, he was reluctant to answer questions regarding the interest shown by US electric car manufacturer Tesla Inc. in building a factory in Indonesia.

“I still have to adhere to the NDA (thus, I cannot provide the answer),” he stated.

He informed that his ministry is also in investment negotiations with Chinese automaker BYD.

A number of other foreign electric car manufacturers, such as South Korean company Hyundai and Chinese corporation Wuling, have built their factories and started producing vehicles in Indonesia.

Hyundai has plans to build a new factory in Indonesia, he added.

In addition to electric cars and buses, the Indonesian Government is also providing an incentive of Rp7 million (US$455.21) per unit for the purchase of electric motorbikes as well as through the conventional-to-electric motorcycle conversion program.

The government is targeting to provide the assistance to 250,000 motorbikes this year — 200,000 units of newly purchased electric motorcycles and 50,000 units of converted conventional motorcycles.

The incentives for the purchase and conversion of electric motorcycles took effect from Monday (March 20, 2023).

ANTARA

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