International Asia Indonesia's Molina spearheads country's national electric car efforts

Indonesia’s Molina spearheads country’s national electric car efforts

The project is being developed as a collaboration by five universities

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Five state universities are collaborating to develop a national electric car known as Molina in a bid to spearhead a new era in Indonesia.

Minister of Research Technology and Higher Education Mohamad Nasir said the University of Indonesia (UI), Bandung Institute of Technology (ITB), Gajah Mada University (UGM), Sebelas Maret University (UNS) and the Sepuluh November Technology Institute (ITS) all have a different role to play in this project.

The five colleges have been jointly developing Molina since 2012.

The roles taken by the five universities are the development of batteries, control systems, design, prototype tests, and so on.

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But a World Bank report says Indonesia will have difficulty exporting its electric vehicles because it is not part of the global supply chain.

Indonesia is also banking on potential export and import of electric vehicles to increase the country’s foreign exchange rate and bring in much needed foreign direct investment in the sector.

“However, much of the incentives or tax exemptions provided cannot fix the problem and increase the competitiveness of the automotive, textile, electronics, pharmaceutical, or other manufacturing industries in Indonesia,” said the World Bank.

It said Indonesia’s hope to start such exports is not easy because the country does not have enough skilled workers.

Yet, Indonesia is saying the tax incentives it is offering to boost the sector are not the only strategy the country has to increase its automobile exportation competitiveness, according to the Head of the Fiscal Policy Office of the Ministry of Finance Suahasil Nazara.

The government is not only focusing on export competitiveness but also on infrastructure development, the labour market, ease of doing business, and central-regional relations.

These are all part of its export strategies, it says.

On August 8, 2019, President Joko Widodo signed a Presidential Regulation Number 55 Year 2019 regarding the acceleration of the battery-based electric motorized vehicle program for road transportation. This regulation contains fiscal and non-fiscal incentives for the development of electric vehicles.

“We understand the warnings from the World Bank. However, that does not mean the government does not issue tax incentives anymore. Issuance of fixed tax incentives, but we still have homework to overcome, “said Suahasil according to media reports.

Nevertheless, the business circles in Indonesia believe tax incentives are still needed to attract investors in the technology sector.

They say the country also needs investment to develop the electric vehicle industry.

On the other hand, the five universities involved in the development of the national electric car are funded by the government with support from the Ministry of Research and Technology together with the Education Fund Management Institution.

The results of this study weigh in the development of electric cars in the country, including the production of electric cars in Indonesia. -/TISG

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