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View all search resultsJapanese automakers raise concern over local content rules
Southeast Asia’s largest economy will raise its local content requirement, also locally known as TKDN, for locally produced battery electric four- and two-wheelers to 60 percent from 40 percent on Jan. 1, 2027, before raising it to 80 percent in 2030 under Industry Ministry Regulation No. 6/2022.
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Workers assemble electric cars on Sept. 3 at a BYD factory in Subang, West Java. Indonesia’s The Industry Ministry is seeking to increase the minimum domestic component level for electric vehicles to 80 percent by 2030 to support the development of the auto parts industry. (Antara/Hafidz Mubarak A)
J
apanese automakers and suppliers have expressed concern over Indonesia’s local content requirements for electric vehicles as the country prepares to raise the threshold to 60 percent next year as part of a push to deepen its EV industry.
The issue was raised during a meeting between Japanese industry executives and government officials in Nagoya, Japan, on Saturday, where they discussed licensing, financing for small and medium-sized suppliers and certification of local content rules as the country shifts toward EVs, according to the Office of the Coordinating Economy Minister.
“The government welcomes all the feedback and is committed to refining the policies through concrete measures, including addressing ongoing investment barriers,” the office’s secretary, Susiwijono Moegiarso, said in a press release on Sunday.
The meeting brought together executives from PT Toyota Motor Manufacturing Indonesia, PT Denso Indonesia, PT Aisin Indonesia and PT Advics Manufacturing Indonesia.
Indonesia will raise its local content requirement, locally abbreviated as TKDN, for locally produced battery electric four- and two-wheelers to 60 percent from 40 percent on Jan. 1, 2027, before raising it to 80 percent in 2030 under Industry Ministry Regulation No. 6/2022.
Indonesia has long relied on local-content rules to protect domestic industries while using the requirements to encourage manufacturers to build more of their supply chains in the country.
The current 40 percent threshold was designed to help create an EV market and attract initial manufacturing investment while the higher thresholds are meant to push companies to source more of their parts in the domestic market, including locally made battery components.
