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Long way to go before Indonesia produces electric vehicles
Expensive EV components and import tariffs hamper efforts to develop the local electric vehicle industry.
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Finance Minister Sri Mulyani tries out a Toyota Prius plug-In hybrid electric vehicle at the 27th Gaikindo Indonesia International Auto Show in BSD City, Tangerang, Banten, in July. Local electric car manufacturers have called on the government to provide fiscal incentives to make electric vehicles more affordable. (ANTARA FOTO/Muhammad Iqbal)
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ocal electric vehicle (EV) makers need fiscal incentives and regulatory simplicity in order to strengthen their presence in the world’s fourth most populous country and help the government realize its ambition to establish a strong EV manufacturing industry.
Without incentives and business-friendly regulations, the government plan to establish a strong electric vehicle manufacturing industry will be difficult to materialize.
Local EV maker PT Great Asia Link (GRAIN) expert staff member Robert Aritonang said the company would need fiscal incentives from the government to produce its vehicles, citing the high cost of EV components and import tariffs as the main aspects that hampered the local industry.
“I am asking the government to provide EV makers with fiscal incentives, such as an import [tax] waiver, at least for the pilot project, so that we can cut production costs and determine market demand,” said Robert during a discussion between industry players and government representatives in Jakarta on Thursday.
Robert said complicated bureaucratic procedures also hampered business, urging the government to ease procedures in forthcoming ministerial regulations following the issuance of Presidential Regulation No. 55/2019 on EVs.
“It is true that there is a one-door policy, but we are still obliged to report to several entities. On top of that, bureaucratic procedures also pose complications for us,” he told The Jakarta Post.
Robert’s opinion is in line with a World Bank economic assessment conveyed to President Joko “Jokowi” Widodo earlier this month that says a series of nontariff measures have made the importation of capital goods difficult for electric carmakers.
