AHY Urges EV Industry to Boost Local Component Levels

AHY Urges EV Industry to Boost Local Component Levels

Tempatdonasi.com – In a recent address at Grab’s Green Step Movement for Indonesia event in Jakarta, Agus Harimurti Yudhoyono, the Coordinating Minister for Maritime Affairs and Investment, highlighted the importance of increasing local component levels to kickstart the production of electric vehicles within Indonesia. The minister emphasized that the country’s path toward a sustainable automotive sector hinges on developing its domestic manufacturing capacity, ensuring that critical parts of EVs are sourced and produced locally rather than relying heavily on imports.

“Domestic component levels need to increase and dominate. Eventually, it can truly be 100 percent made in Indonesia,” he stated after attending the event at Taman Mini Indonesia Indah on Monday, June 29, 2026.

Yudhoyono pointed to the progress of neighboring nations in the EV space as a model for Indonesia, asserting that the nation is fully equipped to follow their lead. He argued that the success of these countries in scaling up their electric vehicle industries demonstrates that local production is achievable, provided the right strategies and investments are in place. “We must prioritize building a self-reliant EV ecosystem,” he added, underscoring the need for a shift from dependence on foreign components to self-sufficiency in core technologies.

The minister also addressed the role of domestic technological innovation, stating that Indonesia’s engineers are capable of driving advancements in the EV sector. “Our workforce has the expertise to compete globally,” he noted, suggesting that partnerships with multinational corporations or international research initiatives could accelerate progress. By collaborating on joint ventures, the country could develop specialized skills and infrastructure, such as battery production facilities or advanced electronics manufacturing, which are currently major bottlenecks in the industry.

Yudhoyono acknowledged that the government plays a pivotal role in creating an environment conducive to EV growth. He outlined the need for a comprehensive strategy that includes policy frameworks, financial incentives, and infrastructure development. “Supportive regulations and targeted incentives will be essential to attract investment and encourage innovation,” he explained. This could involve tax breaks for companies adopting green technologies, subsidies for research and development, or grants for startups focused on EV components.

Despite these efforts, the president has consistently stressed the importance of unwavering determination to establish a national automotive industry, beginning with an electric vehicle-focused approach. “We must have a strong will to build something sustainable,” he said, emphasizing that the transition to EVs requires not only technological readiness but also a cultural shift toward long-term planning. Yudhoyono noted that the current focus on expanding the EV sector is part of a broader vision to reduce reliance on imported vehicles and position Indonesia as a regional leader in green manufacturing.

Yudhoyono cited China’s rapid rise in the EV sector as a benchmark, noting that the country’s journey began with imperfect products that required significant research and development to refine. “This is an inevitability for any growing industry,” he added, highlighting that initial challenges are part of the process of scaling up production and innovation. The minister praised China’s ability to overcome early obstacles, such as limited battery technology and supply chain inefficiencies, by investing heavily in domestic capabilities.

Currently, Indonesia lacks fully developed electric vehicle brands, though the government has outlined plans to address this gap. The I2C (Indigenous Indonesian Car) initiative, spearheaded by PT Teknologi Militer Indonesia, aims to create a national car model that integrates locally produced components. This project represents a strategic step toward achieving self-sufficiency in the automotive industry, with the potential to reduce costs and enhance export competitiveness. “I2C is a symbol of our commitment to innovation,” Yudhoyono said, stressing that the initiative will serve as a platform for integrating EV technologies into the domestic market.

The minister’s remarks align with broader discussions about the role of subsidies and incentives in fostering EV adoption. While specific policies are still under consideration, the government is expected to introduce measures that reduce the financial burden on manufacturers and consumers. These could include direct subsidies for EV purchases, tax exemptions for companies investing in local production, or grants for developing critical supply chains. Yudhoyono hinted at the urgency of these actions, noting that delaying investment in local components could risk falling behind in the global shift toward electrification.

Looking ahead, Yudhoyono expressed confidence in Indonesia’s ability to become a major player in the EV market. “The foundation is already being laid,” he remarked, referencing the existing infrastructure and skilled workforce. However, he warned that sustained progress depends on consistent support from both the public and private sectors. “We must maintain momentum and ensure that every step is aligned with long-term goals,” he said, calling for a coordinated effort across industries and government agencies.

Indonesia’s push for domestic EV component production also has economic implications. By developing local manufacturing, the country could create jobs, reduce trade deficits, and stimulate growth in related industries such as renewable energy and battery technology. Yudhoyono acknowledged that this transition would require time, but he remained optimistic. “We are not just chasing trends—we are building a legacy,” he said, highlighting the importance of strategic planning and perseverance.

The minister’s vision for the EV industry in Indonesia reflects a growing recognition of the sector’s potential to drive economic transformation. With the right policies, investments, and collaboration, the nation could overcome current challenges and position itself as a key supplier of EV components in Southeast Asia. As the government moves forward with its plans, the focus on local component levels will remain central to achieving a fully indigenous electric vehicle industry.

Read: National Car and EV Subsidies Currently Under Discussion

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