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Indonesia’s EV ambitions could help boost investments in the rest of Southeast Asia

- Indonesia’s EV-friendly policies have lured global investors to the country, but experts say they could also boost investments in Southeast Asia’s automotive industry more broadly.

- The Southeast Asian country is rich in copper, nickel, cobalt and bauxite — materials essential for the manufacturing of electric vehicle batteries.

- Indonesia has banned exports of certain metals and minerals in a bid to draw investors and manufacturers in need of those materials to its shores.


Indonesia’s EV-friendly policies have lured global investors to the country, but experts say they could also boost investments in Southeast Asia’s automotive industry more broadly.

Indonesia could be the “gateway” to the rest of the Association of Southeast Asian Nations, said Anindya Novyan Bakrie, CEO and president director of Bakrie & Brothers, an Indonesian conglomerate whose electric vehicle unit VKTR manufactures electric buses as well as EV parts.


The Southeast Asian country is rich in copper, nickel, cobalt and bauxite — materials essential for the manufacturing of electric vehicle batteries. Indonesia is the largest nickel exporter, accounting for 22% of the world’s reserves, according to a report by the ASEAN Briefing.


The country’s goal to become a global EV battery hub has seen significant support in recent years. Asian automakers like Toyota and Hyundai have made billion-dollar investments to expand EV production facilities in Indonesia.


A 2022 ASEAN investment report noted that EV battery production made up a significant share of foreign direct investment in the region between 2019 and 2021, especially in Indonesia, Malaysia, and Thailand.


Despite Indonesia’s efforts, the country still faces hurdles in boosting vehicle production.

“It will be tough for Indonesia to replace Thailand as a regional vehicle production hub, as the latter has a long-established export-oriented automotive industry. Indonesia will also face challenges from lower-cost producers like Vietnam and the Philippines,” said Nishita Aggarwal, automotive analyst at EIU.

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