Ford Motor is expected to establish an electric vehicle (EV) manufacturing facility in Indonesia in 2025, according to an official from the Ministry of Industry.

Deputy Industry Minister Faisol Riza expressed optimism regarding the growth of Indonesia's EV industry and expressed hopes for an increase in the number of locally produced EVs entering the market.

"Ford has committed to realising its factory and investment in Indonesia by next year," Faisol stated at an event in Jakarta.

He further noted, "It seems that some global automobile manufacturers that previously exited the market are now planning to return," referring to Ford's withdrawal from Indonesia in 2016.

Earlier in November, State-Owned Enterprises Minister Erick Thohir revealed that discussions were ongoing between government officials and international automakers, including Ford and Volkswagen of Germany.

Minister Thohir highlighted that these negotiations had been prioritised by President Prabowo Subianto during his overseas visit in November.

Erick's presentation outlined plans for a significant investment of US$ 6.5 billion by Vale, in collaboration with Ford and Volkswagen, for the development of nickel processing facilities in South-East Sulawesi and Central Sulawesi.

Ford's involvement in Indonesia also includes a partnership with Vale Indonesia and China's Zhejiang Huayou Cobalt on a US$ 4.5 billion nickel processing project.

Indonesia is striving to position itself as a key player in the global EV supply chain, leveraging its substantial nickel reserves, which are critical for EV battery production.

Faisol noted the government's focus on fostering market creation within the country over recent years, asserting that this strategy would yield tangible outcomes by the close of 2026.

"We are now witnessing the results of policies implemented several years ago," Faisol remarked. "We aim to attract all manufacturers to establish production facilities in Indonesia due to their significant social and economic impacts, particularly in terms of job creation."

The deputy minister also highlighted ongoing efforts to enhance local production, mentioning that manufacturers such as Polytron are already producing electric two-wheelers locally and are now progressing towards electric four-wheeler production.

Chinese EV manufacturers, including BYD, Wuling, Chery, and Neta, have captured a substantial share of Indonesia's electric car market this year, intensifying competition for established players such as Hyundai.

Faisol stressed the necessity of increasing local content requirements for automotive production, as outlined in ministry regulations, to attract more global players to the country.

Faisol articulated an ambitious local content target for the EV industry, aiming for 40% by the end of 2026, rising to 60% by the end of 2029, and reaching 80% by 2030. "We are committed to building an EV ecosystem that adheres to these local content targets," he stated. "This initiative is critical not only for industrial growth but also for generating substantial social and economic benefits, including employment opportunities."

However, the plan to raise local content requirements has faced criticism from foreign chambers of commerce and potential investors.

RMA Indonesia, the authorised Ford distributor in the country, reaffirmed its commitment to the Indonesian market, stating on 30th November that the company would continue evaluating opportunities to introduce optimal mobility solutions to local consumers.

"Ford and RMA Indonesia are consistently exploring opportunities to deliver suitable vehicles for each market, including EVs, by maximising existing resources and infrastructure," the company commented.