Toyota investing $2 billion to develop EVs in Indonesia, but plans start with hybrids

Toyota will invest $2 billion to develop electric vehicles in Indonesia, according to the country’s coordinating ministry for maritime affairs. But those plans will at least start with a focus on hybrids.

Indonesia’s Coordinating Minister for Maritime Affairs Luhut Pandjaitan and Toyota president Akio Toyoda agreed on the deal in Osaka on Thursday, Reuters reports.

Toyoda said the carmaker would increase its investment in stages from this year to 2023 until it reaches 28.3 trillion rupiah ($2 billion), also noting in a statement from the ministry that “because the Indonesian government already has an electric vehicle development map, Toyota considers Indonesia a prime EV investment destination.”

Those stages are slated to start with the development of hybrid vehicles, though details are scarce on just how the increasing investment will be implemented over time.

Carmakers are becoming more attracted to Indonesia as an EV market, possibly due to a variety of factors, including EV tax cuts, tariff agreements, and its reserves of nickel laterite ore, which could make it a larger force in lithium-ion battery development in the future. But as Reuters notes:

Analysts are cautious however on how quickly Indonesia’s EV ambitions can be carried out, as some of its lithium battery projects require complicated nickel smelter technology.

Earlier this month, Toyota said it would be accelerating its EV plans. It announced battery partnerships with China’s Contemporary Amperex Technology (CATL) and BYD, and unveiled images of what its all-electric vehicles might look like.

But although the carmaker is looking to push in that direction, Toyota made it clear that it still doesn’t plan to prioritize all-electric vehicles, nor does it plan to abandon hybrids or fuel cell vehicles.

Toyota also recently announced a partnership with Subaru to develop an electric platform for all-electric SUVs.

Electrek’s Take

Toyota wants to be a part of the Indonesia EV market as it blossoms, but being Toyota, it’s unsurprising that electric plans would kick off with hybrids.

Considering the timeframe and carmaker here, we wondering if the focus remains on hybrids for a few years, before some type of shift to all-electric vehicles in the market by 2022 and/or 2023 — though it may just be a partial shift.