On January 18, Chinese electric car manufacturer BYD launched three passenger car models in Indonesia, entered Southeast Asia's largest economy, and attracted investment with new incentives.。

At the launch ceremony in Jakarta, BYD introduced the popular Seal sedan, Atto 3 SUV (ie, domestic yuan PLUS) and Dolphin hatchback to the Indonesian market, with prices yet to be determined, but company executives said they would be announced next month。

Zhao Ying, head of BYD's Indonesia business, said at the launch: "Indonesia has always been a strategic destination for many international companies to expand overseas, and later this year, we will start the construction of the factory.。"

It is understood that the relevant vehicles will be imported directly from China, using lithium iron phosphate batteries instead of nickel-based batteries.。And given Indonesia's rich reserves of nickel resources (a key component of long-range electric vehicle batteries), BYD's decision to choose to start production in Indonesia is questionable.。

A few days ago, Indonesia issued a new rule stating that automakers can sell a certain number of imported electric vehicles (in direct proportion to the automaker's commitment to develop local production capacity) without import duties and luxury goods taxes.。Manufacturers wishing to enjoy preferential policies must submit proposals by the end of 2025, must have production facilities completed by 2026, and must start production at least by 2027.。

Zhao Ying said: "For market demand, we plan to set up at least 50 sales outlets across Indonesia by the end of 2024, and the company is also considering joining Indonesia's electric vehicle ecosystem.。"

Meanwhile, Indonesian Economic Affairs Coordinating Minister Airlangga Hartarto said at the press conference via video conference that BYD will invest US $1.3 billion in the construction of production facilities and make a promise of 150,000 units of production capacity.。

In the last quarter of 2023, BYD surpassed Tesla to become the world's largest electric vehicle manufacturer by sales. It has now entered Southeast Asian markets, including Thailand, Singapore, Malaysia and Vietnam, and has also announced investment plans in some of these countries.。

According to wholesale data from the Indonesian Automobile Industry Association (Gaikindo), sales of battery electric vehicles in Indonesia jumped from 10,327 in 2022 and 687 in 2021 to 17,051 last year, an increase of nearly 70%。

Kukuh Kumara, Secretary General of Gaikindo, believes that the relatively high price of electric vehicles compared to internal combustion vehicles is a major problem for the popularity of electric vehicles in the country, because most owners who buy electric vehicles are not first-time car buyers。Data show that last year, Indonesia's electric car sales accounted for only 1.7%, with total sales of about 1 million vehicles。

Before entering the Indonesian electric passenger car market, BYD started selling electric buses through VKTR Mobilitas, a subsidiary of the Bakrie Group.。TransJakarta has used dozens of BYD buses in the past two years, and VKTR last year also said it wanted to sell more BYD buses in Indonesia.。

Kukuh says Chinese companies have great potential to deepen their market penetration in Indonesia's public transport sector。BYD features commercial vehicles, while Indonesia's big cities may want to use electric vehicles for public bus services。

The Indonesian government has been pushing to expand the domestic electric vehicle market, subsidizing the purchase of electric two-wheelers and four-wheelers.。However, major Indonesian automakers, dominated by Japanese companies, are still hesitant to explore the electric vehicle market。

Statistics show that Japanese automakers account for more than 90% of Indonesian car sales, but Toyota, Lexus and Nissan sold only 799 electric vehicles in Indonesia last year; South Korea's Hyundai Motor Company is a leader in this field, last year More than 7,400 vehicles were sold, followed by China's Wuling Motor Company with sales of nearly 7,000 vehicles。

A Japanese government official expressed regret over the decline in the market share of Japanese car brands in Indonesia and believed that BYD may occupy the market after entering Indonesia。He analyzed: "In Indonesia, Chinese companies also control the mineral resources business.。For Japanese carmakers, electric cars are crucial to the Indonesian market。"