Japanese carmaker Toyota Motor Corp (7203.T) plans to invest 27.1 trillion rupiah ($1.80 billion) in Indonesia in the next five years to produce electric vehicles (EVs), Indonesia’s economics ministry said on Wednesday.
The Southeast Asian country aims to become a global hub for producing and exporting EVs through processing its rich supplies of nickel laterite ore for use in lithium batteries.
A string of other global companies have already announced big investments in this area including South Korea’s Hyundai Motor Group and LG Energy Solutions, a unit of LG Group.
Indonesia’s chief economics minister Airlangga Hartarto said in a statement Toyota had invested 14 trillion rupiah in the country since 2019.
“I believe demand for EVs whether its four-wheels or two-wheels will keep increasing in Indonesia and ASEAN,” Airlangga said after meeting Toyota’s Vice Chairman Shigeru Hayakawa a day earlier in Tokyo.
Indonesia, which has a population of 270 million, aims to sell only electric cars and motorcycles by 2050 to replace vehicles powered by combustion engines, a minister has said, as the country seeks to reduce its carbon emissions.
The nation has also set a target of having 13 million electric motorcycles – including converted ones – and 2.2 million electric cars on its roads by 2030.
Toyota plans to produce various types of hybrid EVs in its pipeline over the next four years, according to the ministry’s statement.
“We hope with this additional investment, Indonesia’s government understands our seriousness to invest in EVs,” Toyota’s Hayawaka was quoting as saying in the statement.
Toyota declined to give details of the investment discussed in the meeting.
On Tuesday, Indonesia also announced that Mitsubishi Motors Corp (7211.T) planned to invest about 10 trillion rupiah in Indonesia between 2022 and 2025 to produce hybrid and battery EVs.
The investment commitments by the Japanese car makers come as Indonesian President Joko Widodo visits Japan this week to promote economic ties.
($1 = 15,020.0000 rupiah)