Indonesia’s financial services authority (also known as Otoritas Jasa Keuangan or OJK) has eased lending rules for car buyers who purchase electric vehicles in the country. According to Reuters, the move, which is aimed at encouraging the adoption of electric vehicles, will also be extended to business loans linked to EVs as a means to increase investment in the sector.
In a statement, OJK that buyers of EVs will have a slightly easier access to loans due to the rules on credit assessments and risk calculation being eased. Additionally, industries that produce components and batteries for EVs will also benefit from the initiative, while those that aid in the development of relevant infrastructure, such as charging stations, could be exempt from limits set by OJK.
Aside from easing lending rules, the country’s central bank – Bank Indonesia – also announced during its last policy meeting to remove loan downpayment requirements for purchases of environmentally-friendly vehicles for lenders with low non-performing ratio levels.
The country has already expressed its interest at accelerating the development of its domestic electric vehicle industries, as part of a regulation released in 2019. It’s also targeting to create a full nickel supply chain industry, and has stopped the export of unprocessed nickel ore to ensure sufficient supply for domestic processing for use in upcoming battery chemical plants.
Several carmakers and companies have expressed their interest in building EV plants in Indonesia thanks so such incentives being peddled by the government, with Toyota stating last year that it would commit 28.3 trillion rupiah billion to develop electrified vehicles in Indonesia over the next four years, starting with hybrid vehicles.
Meanwhile, in June this year, Hyundai and LG Chemical revealed that they are working on setting up a battery plant in the country, with plans to utilise the facility as a hub to target the future electric car market in Southeast Asia.
Indonesia isn’t the only country with a proper EV development roadmap, as other countries like Thailand and Vietnam have also laid out the groundwork for greater electrification within their respective automotive industries. With our neighbours moving rapidly, Malaysia appears to be on the backfoot on this matter, as we have yet to iron out the details when it comes to incentives, a driving factor in EV adoption.