Chinese Electric Vehicles Flood Indonesian Market Due to Favorable Tariffs

JAKARTA, investortrust.id – The surge of Chinese electric vehicles (EVs) in Indonesia is largely driven by the country’s low import tariffs, according to PT Indonesia Battery Corporation (IBC) President Director Toto Nugroho.

Toto acknowledged that EV adoption in Indonesia has accelerated over the past year, especially after June 2024, when multiple Chinese brands entered the market with highly competitive prices.

“For example, the tariff on EV batteries from China to the United States is nearly 40%, whereas shipments from Indonesia are likely to be taxed at just 10%,” Toto said during a hearing with Commission XII of the Indonesian Parliament in Jakarta on Monday, Feb. 17, 2025.

Indonesia’s Strategic Role in the EV Industry

Toto explained that China’s increasing presence in Indonesia’s EV industry is due to the country’s potential as a production hub for batteries and energy storage systems.

“China is aggressively expanding into Indonesia to establish a base here and supply EV and energy storage batteries to the U.S. market,” he stated.

Indonesia holds a critical position in the global battery supply chain, with 40%-50% of the world’s EV battery raw materials originating from the country. The nation boasts vast reserves of nickel, copper, cobalt, and bauxite, all essential for battery production.

Indonesia’s Potential as a Global Battery Production Hub

Indonesia’s wealth of strategic minerals presents an opportunity to become a key player in the EV battery industry.

“We have the potential to be a major production hub for batteries—not just because of our nickel reserves, but also due to our copper, cobalt, manganese, and aluminum resources,” Toto added.

With China’s growing interest in Indonesia’s EV and battery ecosystem, the country is positioning itself as a global leader in battery manufacturing and electric mobility solutions.