The new BYD factory in Indonesia will have a capacity of 150,000 units. Credits: Chatchai Somwat/Shutterstock.

Chinese electric vehicle (EV) manufacturer BYD will build a $1.3bn plant in Indonesia, the Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto said today (18 January).

The factory will have a capacity of 150,000 units. Speaking in a video message, Hartarto welcomed BYD’s plans and said the move “can strengthen the era of electric vehicles”.

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In a separate move, BYD introduced its three new EV models – BYD Seal, BYD Atto 3 and BYD Dolphin – to the Indonesian market during an event taking place at Taman Mini Indonesia Indah (IMII) on the southeastern outskirts of Jakarta, Indonesia’s capital.

FDI inflows in the country reached $45bn in 2022, increasing by 46.7% from a year before, figures by Statistics Indonesia show. According to GlobalData, international companies announced 188 new projects in Indonesia in 2022, marking a 66% rise from 2021.

Interest in Indonesia’s EV market, in particular, has surged due to its vast nickel reserves, a resource used to manufacture EV batteries. According to the US Geological Survey, the country boasts 21 million tonnes of nickel reserves or around 22% of global reserves.

Taking account of Indonesia’s rising EV market, in September 2023, Singaporean-Vietnamese EV maker VinFast promised to invest $200m in an assembly plant in Indonesia. 

The plant will be capable of producing 40,000 car units each year and is due to become operational in 2026.

“We plan to commence deliveries of our EVs in Indonesia in 2024 with right-hand driving models of the VF e34 and VF 5, with the VF 6 and VF 7 to follow,” the company said in a statement at the time. “We have also identified Indonesia from among our seven new market clusters as a key potential market for the establishment of manufacturing facilities for our EVs and batteries due to the relatively low cost and availability of domestic raw materials.”

VinFast is looking to invest a total of $1.2bn in the Indonesian market in the long term.