"Chinese companies BYD and Neta aim to expand their electric vehicle business in Indonesia by making significant investments"
Indonesia's automotive landscape is undergoing a significant transformation, with electric and hybrid vehicles (EVs) gaining popularity. Sales of hybrid cars in the country saw a 5.2 times increase in volume in 2023, mirroring a growing trend towards cleaner and more sustainable transportation options.
The Indonesian market saw the sale of approximately 1 million new cars last year, with Japanese brands dominating the scene, controlling over 90% of the market. However, the landscape is changing as Chinese and South Korean automakers make their way into the market.
Chinese electric vehicle maker BYD announced plans to build a USD 1 billion factory in West Java, set to commence construction in August 2024 and begin operations in January 2026. At the Periklindo Electric Vehicle Show, BYD showcased its Dolphin model, priced around IDR 425 million (USD 26,115), with deliveries expected to start in July.
Neta Auto, another Chinese automaker, is also moving into Indonesia's car market. They announced plans to increase their investment in the country by initiating local production, starting operations in the second quarter of 2024. Neta signed an agreement with Handal Indonesia Motor in November 2023 to assemble EVs in Indonesia. They also unveiled the Neta V-II at the same show, priced from IDR 200-300 million (USD 12,290-18,430), making it the least expensive car in Neta's Indonesia lineup.
The Indonesian government is leveraging the country's nickel resources to attract investments from electric battery and vehicle producers. President Joko "Jokowi" Widodo's government is making efforts to make Indonesia an indispensable part of the global supply chain and foster homegrown manufacturers.
Demand for EVs in Indonesia is driven by young consumers and families, with sales of battery electric cars jumping nearly 70% last year, reaching 17,051 vehicles. South Korea's Hyundai Motor has already started full-scale production at an Indonesian factory. China's Wuling Motors operates an assembly line for its Air EV model in Cikarang, West Java, Indonesia.
Incoming president Prabowo Subianto is expected to follow Jokowi's EV policies. Japanese carmakers are staying the course on hybrid vehicles rather than immediately shifting to fully electric cars. The Indonesian government's support for the EV industry and the growing demand from consumers promise a bright future for electric and hybrid vehicles in Indonesia.
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