Indonesia gives automakers more time to qualify for EV credits in investment bid 

Indonesia said on Thursday it would give automakers two more years to qualify for electric vehicle incentives in Southeast Asia's largest auto market, a move followed by investment commitments by China's Neta EV brand and Mitsubishi Motors. 

The moves announced at the Jakarta auto show come as Indonesia races Thailand and India to build out an EV industry as an alternative to China, the world’s largest producer. 

Under the relaxed investment rules announced Thursday, automakers need to commit to producing at least 40% of the content of EVs in Indonesia by 2026 to qualify for incentives, two years later than the initial target. The 40% threshold had been set to encourage local battery production. 

"The relaxation on the local content requirement is to attract the investors," Indonesia's industry minister Agus Gumiwang Kartasasmita told reporters on the sidelines of the Jakarta auto show. 

Indonesia is Southeast Asia’s largest auto market and its second-largest production hub behind Thailand. Toyota, its affiliate Daihatsu and Honda account for two-thirds of sales but have been slow to pivot to EVs. 

Indonesia’s government has set an ambitious target of producing some 600,000 EVs by 2030. That would be more than 100 times the number sold in Indonesia in the first half of 2023. 

Indonesia had earlier said it would reduce import duties from 50% to zero for EV makers planning investments. That was seen as aimed at attracting Chinese EV makers and potentially Tesla, a company the government has long courted. 

“We roll out incentives for all the global carmakers, not for a certain name only,” Agus said. 

The industry ministry said Mitsubishi Motors had committed about $375 million to expand production, including for the Minicab-MiEV electric car. Mitsubishi said production of the EV would start in December. 

Neta, an EV brand of China's Hozon New Energy Automobile, said it had begun taking orders for the Neta V EV and would start local production in 2024. 

Until now, only two manufacturers have shifted enough production to Indonesia to qualify for full incentives: Wuling Motors and Hyundai. Both have factories outside Jakarta and lead the market in EV sales. 

Wuling offers the cheapest EV on offer in a market where analysts say affordability is one challenge to wider adoption. The Chinese carmaker plans to announce a cheaper version of the Air EV, starting at around $13,200, people familiar with its plans told Reuters.  

Wuling did not immediately respond to a request for comment. 

Toyota used its presentation at the Gaikindo Indonesia International Auto Show outside Jakarta to showcase locally produced hybrids. Toyota said it would deploy 200 charging stations at dealerships but had not committed to building EVs locally. 

"We don't have a concrete plan yet," Hiroyuki Ueda, president of Toyota-Astra Motor, a joint-venture between the Japanese carmaker and Indonesian conglomerate PT Astra International (ASII.JK), told Reuters. 

Source: Reuters

High-speed railway delayed again, but it’s for the better, experts say

Operators of the Jakarta-Bandung high-speed railway have announced yet another delay of the flagship project’s soft launch to early September, citing the need to ensure preparedness and safety. 

The announcement means trains will not start running on Aug. 18, which was supposed to mark the beginning of a public free trial. 

“As the first high-speed rail link in ASEAN, operating the train requires very careful preparation. All aspects will be prepared properly to prioritize customer safety,” PT Kereta Cepat Indonesia China (KCIC) spokeswoman Eva Chairunisa said in a statement on Monday. 

The KCIC is the Jakarta-based Indonesian-Chinese consortium responsible for the high-speed railway project. 

This is in line with Deputy State-Owned Enterprises (SOEs) Minister Kartika Wirjoatmodjo’s statement on July 31 that President Joko “Jokowi” Widodo would ride the train for the first time on Sept. 1 and officially inaugurate it five days later in a bilateral event with China. 

That would leave less than a month before the planned commencement of commercial operations on Oct. 1. 

Prior to the announcement, the KCIC asked the government to consider granting the company a “temporary operating license” to launch operations on Aug. 18, according to a mid-July document seen by The Jakarta Post. 

Experts queried by the Post said they had never heard of such a permit and urged the government to stick with the actual procedure and postpone the free trial for the sake of safety. 

Government Regulation No. 33/2021 and its implementing regulation also make no mention of a “temporary” permit. To obtain the permit, operators are required to put in place safety procedures, manpower certifications and maintenance systems, among many other perquisites. 

“I disagree with the word ‘temporary’ here. We are still not accustomed [to this new technology],” Aleksander Purba, a transportation analyst at Lampung University (Unila), told the Post on Saturday. 

“If audits and certifications are not done by Aug. 18, then it would be best to [delay the start of operations],” he said, emphasizing that permits should only be issued after the assurance of safety. 

He added that the government ought to consider forming a specialized agency to handle and coordinate tasks related to the railway, such as certification and testing, similar to how the Japan Railway Construction, Transport and Technology Agency (JRTT) handled the Shinkansen railway project in Japan. 

Sutanto Soehodho, a transportation analyst at the University of Indonesia, told the Post on July 31 that a temporary permit would demonstrate that the project could be finished on time, but the reality was that work was still in progress and the rail link was far from complete. 

Even small mistakes could be fatal and any incident could keep the public from using the trains, he warned, adding that that could affect the sustainability of the project. 

Indonesia and China have committed to an all-out effort to ensure high-quality standards for the railway, according to a statement published by the Chinese Foreign Ministry on July 27, following President Jokowi’s two-day visit to the country. 

Risal Wasal, railway director general at the Transportation Ministry, stressed that the prevailing regulation recognized no such thing as a temporary permit. He told reporters on Friday that the ministry was still reviewing the project and would only issue a permit once the process was done. 

Separately, Risal said on Monday that the railway could not be launched without an operating permit, including for the free trial, as quoted from Tempo. 

The KCIC did not immediately respond when asked for comment about a temporary permit, but the KCIC’s Eva said in a statement the company would comply with all of the certification procedures required by the ministry. 

Previously, experts told the Post that certification took up to two months for conventional rail services and could take longer for high-speed services. 

Aditya Dwi Laksana, who heads the railway forum of the Indonesia Transportation Society (MTI), suggested that the government not rush the project as a high-speed rail link was still a novelty for Indonesia and the ministry did not have adequate experience with it. 

“If the process still needs time, then it does not have to [be operational] on Aug. 18, or even in October,” he told the Post on Aug 1. 

Aside from the certification issue, the government has stated that passengers on the new high-speed rail link will not be able to use Karawang Station in the early phase of operations, because while the station is almost completed, its road access is not. 

State-owned Enterprises Minister Erick Thohir said on Monday that the government was focusing on finishing the construction of the stations at Padalarang and Tegalluar in Bandung regency. 

In fact, access to all stations of the high-speed railway is far from done, according to a document seen by the Post in mid-July, which showed that progress on the construction of access to the stations of Karawang and Padalarang had reached only 6 and 5 percent, respectively, at the time. 

KCIC spokeswoman Eva said there had been efforts to speed up work to meet the target but it would be done in accordance with the correct standards and procedures. 

This would include ongoing construction work for stations such as Padalarang, which had reached 70 percent completion, she was quoted as telling Tempo newspaper on Monday. 

Source: The Jakarta Post 

Indonesia looking to expand QR payments to Indo-Pacific countries 

Chair of the ASEAN Business Advisory Council (ASEAN-BAC), Arsjad Rasjid, has said that he is hoping to expand the quick response (QR) code digital payment service not only within ASEAN, but also to Indo-Pacific countries. 

Speaking at a discussion during the commemoration of ASEAN's 56th anniversary in Jakarta on Tuesday, Rasjid said that QR code transactions are one of ASEAN-BAC's priorities in the field of digital transformation. 

"ASEAN-BAC works to promote cross-border digital payments that aim to link payments and (strengthen) micro, small, and medium enterprises (MSMEs) across ASEAN. We wish to expand this (system) to more Indo-Pacific countries," he informed. 

At the 42nd ASEAN Summit in Labuan Bajo, East Nusa Tenggara, in May 2023, ASEAN leaders adopted a declaration on advancing regional payment connectivity and promoting local currency transactions within ASEAN countries. 

ASEAN leaders emphasized the role of faster, cheaper, safer, more transparent, and more inclusive cross-border payment systems and services for providing broader benefits to support regional economic growth and the digital economy. 

They also acknowledged the potential benefits of local currency usage in strengthening financial resilience, deepening regional financial integration by improving intra-ASEAN trade and investment, and bolstering regional value chains. 

Earlier in May, Rasjid, who is also serving as chairperson of the Indonesian Chamber of Commerce and Industry (Kadin), said that the QR code digital payment service is targeted to be implemented in ASEAN countries by September 2023. 

A cross-border QR payment linkage has so far been implemented between Indonesia and Thailand, as well as Singapore. 

The system allows consumers to use their mobile applications to scan QR codes for products and services from countries who participated. 

In addition to advancing payment connectivity, ASEAN-BAC is also committed to supporting the realization of the ASEAN Outlook on Indo-Pacific through greater business partnership and people-to-people as well as business-to-business connectivity. 

Source: Antara News