Citing Indonesia's EV-friendly policies, experts suggest that investments could be boosted in the automotive industry all throughout Southeast Asia. The nation is well-endowed with copper, nickel, cobalt, and bauxite - essential to the processing of electric vehicle batteries. To attract investors and companies in need of those metals and minerals, Indonesia has instituted an export ban on certain substances. This policy has enticed global investors to the nation, while also being capable of increasing investments in the car industry across Southeast Asia. Anindya Novyan Bakrie, President Director of conglomerate Bakrie & Brothers and CEO of their electric vehicle part manufacturer VKTR, believes Indonesia can act as a gateway to the Association of Southeast Asian Nations. Furthermore, the country has abundant copper, nickel, cobalt, and bauxite which are essential in making EV batteries. Indonesia is the leading exporter of nickel, according to the ASEAN Briefing, and is attempting to entice companies like Tesla in order to become a major player in the electric vehicle supply chain. Koketso Tsoai, an analyst for BMI Fitch Solutions, said that the country's natural resources are part of the incentive to invest in EVs, and its government's desire to promote the beneficiation of those resources has made Indonesia even more attractive.
Significant support has been seen in recent years for the country's goal of becoming a global EV battery hub. Notably, Toyota and Hyundai have both made billion-dollar investments in expanding EV production facilities in Indonesia. According to the 2022 ASEAN investment report, EV battery production has comprised a considerable part of foreign direct investment in the region between 2019 and 2021, especially in Indonesia, Malaysia and Thailand. However, Indonesia still faces several obstacles when it comes to increasing vehicle production. Nishita Aggarwal, automotive analyst at the EIU, commented that "it will be tough for Indonesia to take the place of Thailand as a regional vehicle production hub, seeing as the latter already has an established export-oriented automotive industry. Additionally, Indonesia will face opposition from producers with lower costs such as Vietnam and the Philippines."
Nevertheless, Indonesia's burgeoning EV industry could have a positive effect on its neighbors. Maybank's report suggests that through the provision of the essential materials for EV batteries, Indonesia could entice more investors, thus facilitating the adoption of electric vehicles across ASEAN at an accelerated pace and at a lower cost.
Bakrie & Brothers have suggested that investors are probably going to consider ASEAN as a whole when looking at the EV ecosystem, due to Indonesia's abundant natural resources playing a considerable role. The CEO of the company remarked that "Pursuing production of EVs in Indonesia is something companies may contemplate when viewing ASEAN as a bloc." He supposes that countries can "conspire together" to make the most of each other's strengths and experience to improve the EV landscape of the region.
As an illustration, Tsoai commented that Malaysia offers a "unique selection of highly advanced products in an age of growing digitalization in the vehicle business". He emphasized that among ASEAN, Indonesia is set to be in an "especially influential role in the start of the EV supply chain". Though so, Indonesia's pre-eminence in this zone could enhance the knowledge of other nations in Southeast Asia and improve the EV ecosystem across the area.
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