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RI needs to relax local content rule for EV batteries, energy minister says
The ministry cited the limited domestic supply of key battery components and the detrimental effect such scarcity had on subsidized EV adoption in the country.
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Energy and Mineral Resources Minister Arifin Tasrif gives a press briefing at the ministry’s headquarters in Jakarta on Jan. 9, 2020. (Energy and Mineral Resources Ministry/Energy and Mineral Resources Ministry)
T
he country needs to reconsider its local content requirement for electric vehicle (EV) batteries, the Energy and Mineral Resources Ministry said on Tuesday, citing the limited domestic supply of key battery components and the detrimental effect such scarcity had on subsidized EV adoption in the country.
Energy and Mineral Resources Minister Arifin Tasrif said that while the Industry Ministry required a certain proportion of the components of EV batteries to be produced domestically for them to qualify for government subsidies, producers were not currently capable of meeting that threshold.
He asked for the support of lawmakers on House Commission VII overseeing energy and industry in communicating the proposal to the Industry Ministry.
“Since both energy and industry both [coordinate their policy] with Commission VII, I hope this [proposal] can be aligned [with the Industry Ministry],” Arifin told lawmakers.
He also suggested that policymakers set a new timeframe for the enforcement of local content requirements for the EV battery industry.
The current policy requires at least 40 percent of EV components to be produced locally starting next year, and the figure is set to increase to 60 percent by 2029 and 80 percent by 2030.
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