Toyota announced plans to begin building electric vehicles in Indonesia this year as it looks to counter surging Chinese rivals. It will be its third country where Toyota produces EVs, following China and Japan. Later this year, Toyota will also begin building electric pickups in another market.
Toyota plans to build EVs in Indonesia and Thailand
Although Toyota currently controls over 30% of the market, Chinese automakers are quickly invading Indonesia with advanced EVs arriving.
Indonesia introduced new policy and tax incentives last year to boost domestic EV production and lure new brands. This includes reducing the value-added tax (VAT) to just 1% for EVs that are produced at least 40% locally. Those under the threshold are subject to an 11% VAT.
If a company commits to local EV production, it will also be exempt from import tariffs and other taxes that were introduced last year.
According to a new Nikkei report, Toyota will begin building the bZ4X SUV in Indonesia later this year to compete with incoming Chinese competition.
Toyota will leverage its commanding market share to aggressively expand sales with the locally made electric SUV.
The decision to build EVs in Indonesia is part of Toyota’s “multi-pathway strategy,” Hiroyuki Ueda, president director of Toyota-Astra Motor, explained.
Although Toyota has relied on hybrids, or “environmentally friendly vehicles,” as Ueda calls them, it will now offer options for EVs.
Toyota Indonesia exports vehicles to more than 80 countries worldwide. Over the past five years, it has accounted for about 61% of Indonesia’s total CPU (completely built-up) vehicle exports. Although exports fell 5% last year, Toyota believes strong government support and local EV production will help turn things around.
And that’s not all. Toyota also plans to begin building electric pickup trucks in Thailand by the end of 2025, another region where Chinese brands, like BYD, are storming into.
Source: Nikkei, Toyota Indonesia
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