Toyota plans to invest $2 billion in the development of electric vehicles in Indonesia over the next four years. Initial investments will go into hybrid cars.
Toyota president Akio Toyoda and the Indonesian government agreed on the plan in Osaka on Thursday, Reuters reported. In an official statement, Akio Toyoda confirmed that “from 2019 to 2023, we will gradually increase our investments to Rupiah 28.3 trillion ($2 billion)”.
“Because the Indonesian government already has an electric vehicle development map, Toyota considers Indonesia a prime EV investment destination,” Akio Toyoda explained. He said that Toyota will follow the government’s EV plan and invest gradually, starting with the development of hybrid vehicles.
In early 2018, the Indonesian government revealed a road map to enable the country’s transition to electric transport, to increase its own manufacturing capacity, and to make use of the local nickel and cobalt production capacities, essential elements in EV batteries. Indonesia is currently the second largest manufacturer of vehicles in the region after Thailand and intends to expand this capability.
On the roads, the Indonesian government wants a minimum of 20 per cent of vehicles to be electric by 2025. In figures, this means an increase from 150,000 to 400,000 electric cars, and an increase from 800,000 2 million electric motorcycles on the road by that date, and increasing exponentially from that point onwards.
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Now some further along the track, Indonesia seems to have made progress. Mitsubishi announced in mid-2018 it would work with the Indonesian government to research EV infrastructure. South Korea’s Hyundai has dived right in and is investing 880 billion towards electric vehicle production in the country, while Nissan will start sales of the Leaf in Indonesia next year.
Now Toyota is taking up the gauntlet and also investing in South East Asia’s largest economy. Toyota has also most recently focused on electric vehicle production and the battery supply chain in particular. The Japanese car maker already makes batteries for its hybrid vehicles with Panasonic and recently announced its cooperation plans with the Chinese battery giant, CATL.
Earlier this month, the Japanese carmaker announced its intention to achieve its electrical targets five years earlier than previously planned – Toyota is now saying that by 2025, electrified cars should account for half of its sales.
Neither the Indonesian government nor Toyota gave further details on how Toyota intends to implement its investment plans.