Indonesia wants to build a lithium battery center or provide tax relief

According to foreign media reports, the Deputy Minister of Industry of Indonesia stated on January 29 local time that Indonesia’s new electric vehicle policy is about to be finalized, and the government will provide financial incentives to foreign automakers in the future. In addition, the Indonesian government plans to provide tax reduction policies for battery manufacturers, etc., in order to build the image of a lithium battery center.

Indonesian Deputy Minister of Industry Harjanto said: “Our goal is to have 20% of all vehicles produced in Indonesia by 2025 be electric.” He also mentioned himself. Discussions have been initiated with Japanese and Korean automakers.

Indonesia is the second largest automobile manufacturing hub in Southeast Asia after Thailand. Harjanto revealed that the Indonesian government plans to introduce a fiscal mechanism that can provide tax reduction and exemption policies for electric vehicle battery manufacturers and car manufacturers; in addition, Indonesia will also sign tariff preferential agreements with countries that have a greater demand for electric vehicles.

He said: “The lower the carbon emissions of electric vehicles, the less tax burdens manufacturers will bear. We encourage companies in Japan, South Korea, and international Investors come to Indonesia to participate in the electric vehicle business at all levels.'

Harjanto declined to disclose the name of the company it is discussing. However, in December 2018, he revealed to a Reuters reporter that Hyundai Motor of South Korea plans to produce electric vehicles in Indonesia, and this is also part of the company’s plan to invest US$880 million (about 5.9 billion yuan) in Indonesia. . Japan's Mitsubishi Corporation also announced in mid-2018 that it will cooperate with the Indonesian government to conduct research on infrastructure suitable for electric vehicles.

Indonesia is the largest economy in Southeast Asia and has a huge reserve of laterite nickel ore, which is a key raw material for lithium batteries that drive electric vehicles. Therefore, the Indonesian authorities intend to rely on the huge reserves of laterite nickel ore to become the main force in the production of regional lithium batteries and to meet the rapidly growing consumer demand for electric vehicles.

Harjanto said that the US$4 billion (approximately RMB 26.8 billion) lithium battery project currently being built on Sulawesi is expected to be completed in the next 16 months. . The Morrow Valley area where the above-mentioned project is located currently has 20 laterite nickel ore processing facilities, which can supply 1.5 million tons of nickel pig iron to a stainless steel iron factory with an annual output of 3 million tons.

Participants of the above-mentioned lithium battery project include investors from South Korea, Japan and China, which are also regarded as a concrete manifestation of Indonesia's ambition to develop lithium battery projects. However, some analysts also question how fast the plan will advance, because some nickel ore smelting technology is very complicated.