Toyota Spending $2 Billion to Develop Electric Cars in Indonesia
Having recently announced plans to “popularize” battery electric vehicles, Toyota now expects half of its global volume to stem from electrified cars by 2025. That’s five years sooner than originally promised.
Toyota may seem perpetually averse to change but it has been making a lot of moves behind the scenes to ensure it’s at the forefront of a shifting market while also trying to future proof itself in the event that electrification winds up being a dead end. The plan is rather complex and, as I don’t want to re-write a 900-word article, I would like to redirect you to the relevant information.
However, as nuanced as Toyota’s overall strategy may be, the company is still going to need to spend truckloads of cash to remain in the game. With that in mind, the Japanese automaker appears to be investing $2 billion to develop electric vehicles in Indonesia over the next four years — with hybrids being first on the docket.
Although it wasn’t Toyota that broke the news; Reuters got the skinny from Indonesia’s Coordinating Minister for Maritime Affairs Luhut Pandjaitan. According to a press release, Pandjaitan and Toyota president Akio Toyoda just shook on the deal in Osaka.
“From 2019 to 2023, we will progressively increase our investment to 28.3 trillion rupiah ($2 billion),” Toyoda was quoted as saying in the release, adding that Indonesia’s preexisting commitments to EV development made it an obvious candidate for investment.
We imagine Toyota’s current business relationships within the country and its fast-growing automotive sector also played a factor. Indonesia has been aggressively increasing production capacity over the last few years and is eager to have manufacturers move in and take advantage of its burgeoning industrial abilities and access to raw materials.
From Reuters:
Indonesia, the region’s largest economy, has plentiful reserves of nickel laterite ore, a vital ingredient in the lithium-ion batteries used to power EVs, and has been making a push to attract foreign carmakers.
Officials are betting Indonesia, which is already Southeast Asia’s second-largest car production hub, can become a major regional player in lithium battery production and feed the fast-rising demand for EVs.
The country announced earlier in 2019 plans to introduce a fiscal scheme that will offer tax cuts to EV battery producers and automakers, as well as preferential tariff agreements with other countries that have a high EV demand.
Last year, Mitsubishi said it wanted to work with Indonesia to examine whether or not the country has a good spot to build electric vehicles. In December, Hyundai Motor Co. went one better and announced it was already planning on producing EV inside the country and would be moving some assembly out of China as a result.
We’ll be waiting on Toyota to see what the full scope of this $2-billion injection entails. Thus far, the company has made no official comment on the matter and the release only specifies the sizable investment will advance “gradually through the development of hybrid vehicles.”
[Image: NeydtStock/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Let's step back and reflect on what a missed opportunity for a once great company named General ELECTRIC now a shadow of its former self
Many years ago General Electric made a battery powered riding lawn mower. I had a neighbor years ago that had one. Must not have been a large seller since that is the only one I ever saw.