JAKARTA, May 23 (Xinhua) -- As many emerging economies express concern over economic slowdowns caused by U.S. tariff policies, Indonesia currently appears to be the star attraction for international electric vehicle (EV) automakers, boosting EV adoption and manufacturing in Southeast Asia's largest economy.
From 2024 to March 2025, at least seven EV manufacturers invested in the country, with a total investment value of 15.4 trillion rupiah (around 940 million U.S. dollars). According to the country's Ministry of Investment and Downstream Industry, some of these companies have already begun factory construction.
Among the automakers are BYD, Citroën, AION, Maxus, Geely, VinFast, and VW, bringing a combined production capacity of 280,000 units per year.
"Indonesia is an attractive country as an EV investment destination because it has an EV industry chain ecosystem, especially for batteries -- from nickel mining to nickel matte, nickel sulfate, precursor, cathode, anode, cell battery, battery pack, to battery recycling. All of those investments are already in Indonesia. So the whole ecosystem is already in place," Minister of Investment and Downstream Industry Rosan Roeslani said recently in Jakarta.
Currently, there are nine electric car manufacturers in Indonesia, seven electric bus manufacturing facilities, and 63 two- and three-wheeled electric vehicle factories. According to data from the Ministry of Industry, each segment's production capacity is 70,600 units per year for electric cars, 3,100 units per year for electric buses, and 2.28 million units per year for two- and three-wheeled electric motorcycles.
The ministry's director of maritime industry, transportation equipment, and defense equipment, Mahardi Tunggul Wicaksono, said some automotive companies were interested in exploring investments in EV factories and EV batteries as a result of the import tariffs imposed by the U.S. government.
The investment should be sustained because it could bring a multiplier effect to the national economy, including providing job opportunities.
The market share of battery-based electric vehicles in Indonesia continues to rise. In 2023, the market share was 1.7 percent and increased to 4.99 percent in 2024.
Though EV sales in 2024 were still dominated by hybrid electric vehicles, with 55,730 units sold, battery electric vehicle (BEV) sales remained strong at 43,194 units.
In terms of production, Indonesia became the country in the Association of Southeast Asian Nations with the highest BEV output in 2024, totaling 25,861 units, surpassing Thailand by 1,198 units.
Ronald Eberhard, a researcher at the Center for World Trade Studies at Gadjah Mada University in Yogyakarta, said the ongoing tariff war in international trade has opened up opportunities for Indonesia to become a manufacturing hub across various sectors. This is because the trade war prompts global investors to seek new investment locations with lower tariffs.
"Indonesia is currently subjected to an average retaliatory tariff of 32 percent. That is lower compared to our closest competitors, such as Vietnam at 46 percent," Eberhard said. ■