President’s Instruction on EV: Gift for Industry and Political-Business Elites Actors

Jakarta, 22nd September 2022

Jokowi instructed civil servants at national and local level to use battery-based vehicles for private and official vehicles. This was revealed in the presidential instruction, on battery-based electric motor vehicles, which was signed on September 13.

This presidential instruction appears to be a special gift for mining and automotive industry players, as well as political elites who are directly and indirectly involved in the nickel mining industry business and the electric vehicle ecosystem.

This indication is reflected in the activities of the political elite who have begun to penetrate in the nickel mining business (upstream) and the electric vehicle ecosystem (downstream). Some of them are Luhut Binsar Pandjaitan (Minister of Coordinating Ministry for Maritime and Investment Affairs) and Nadiem Makarim (Minister of Education), Sandiaga Uno (Minister of Tourism and Creative Economy), Moeldoko (Head of the Presidential Staff Office), Bambang Soesatyo (Chairman of the People’s Consultative Assembly of the Republic of Indonesia), and Ahmad Ali (People’s Reps. Council of Indonesia, NasDem Faction).

The involvement of Luhut and Nadiem was seen through TBS Energi Utama Tbk (Toba) and PT GoTo Gojek Tokopedia Tbk (GOTO) which established a joint venture company called Electrum. Electrum itself has collaborated with Pertamina and Gogoro Inc., an energy company and electric vehicle manufacturer from Taiwan.

Meanwhile, Sandiaga, through his main company, PT Saratoga Investama Sedaya Tbk (SRTG), has added his share ownership in PT Merdeka Copper Gold Tbk (MDKA) by 1.46 percent to 18.34 percent. MDKA and Tsingshan Group Limited from China have established a new company called PT Merdeka Tsingshan Indonesia (MTI) for the AIM (Acid, Iron, Metal) project which processes the remaining mineral ore from the Wetar copper mine to be processed into sulfuric acid, iron ore pellets, hot steam, sponge copper, and pyrite as raw materials for batteries. MTI shares are owned by MDKA as much as 80% and Tsingshan as much as 20%.

Likewise with Moeldoko, who had already started his electric vehicle business a year before, being appointed presidential chief of staff in January 2018. Under the banner of his PT Mobil Anak Bangsa (MAB), Moeldoko produces a variety of electric-based vehicles: buses, mini vans, to motorcycles.

In addition, there is also Bambang Soesatyo (Bamsoet) who is recorded as routinely promoting an electric motor called BS Electric during the official agenda of the state and party. The motor produced by PT Bhakti Satia Elektrik even published on the official website of the MPR RI. In mid-2021, Bamsoet was appointed chairman of the Supervisory Board of the Indonesian Electric Vehicle Industry Association (Periklindo)—an association that had only been formed two months earlier. Its founder and chairman is Moeldoko.

The same thing also happened for Ahmad Ali, a member of the Indonesian House of Representatives from the NasDem faction. Ali is noted to be affiliated with PT. Graha Mining Utama, PT. Graha Agro Utama, PT. Graha Istika Utama, and PT. Tadulako Dirgantara Travel. In addition, Ali is also listed as a Director of PT. Oti Eya Jaya Abadi, a nickel mining company in Lele, Dampala and Siumbatu villages. The company is suspected to be one of the suppliers of nickel ore to PT. IMIP in Bahodopi, Morowali.

In addition to the business interests of the political elite, the EV Presidential Instruction also seems to benefit the automotive industry that produces electric vehicles starting from Hyundai from South Korea, which established factories in Bekasi, West Java, to Toyota, Mitsubishi, Suzuki, and Wuling.

Similar benefits are also enjoyed by electric battery manufacturers such as Contemporary Amperex Technology Co Limited (CATL) through its subsidiary Ningbo Contemporary Brunp Lygend Co., Ltd (CBL) which collaborates with PT Aneka Tambang Tbk (ANTM) in developing an electric vehicle battery project in Indonesia and LG Energy Solution which has built a factory in the Integrated Industrial Estate (KIT) of Batang Regency.

At the same time, the Electric Car Presidential Instruction has implications for the suffering of citizens and the environment, both related to funding schemes sourced from the State Budget, Regional Budget, and/or other legitimate sources in accordance with the provisions of laws and regulations, as well as the acceleration and expansion of nickel extraction to support the needs of the electric battery industry.

Moreover, long before the Presidential Instruction on EV was signed, President Jokowi had previously issued Presidential Regulation No. 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program for Road Transportation, which regulates the provision of fiscal and non-fiscal incentives for battery-based electric motor vehicles.

In addition to Presidential Regulation 55/2019, the government has also issued a number of incentives to encourage the use of KBLBB (Battery-Based Electric Motor Vehicles), in the form of zero percent PPnBM, a maximum regional tax of 10%, a minimum down payment of zero percent, and a low interest rate. Meanwhile, the manufacturing industry is given a tax holiday, tax allowance, and super tax deduction for research and development.

Thus, this Presidential Instruction on EV is a series of special gifts from President Jokowi for oligarchs, where some of the beneficiaries are in the circle of the state palace.**


Contact Person:

  • Melky Nahar – JATAM Coordinator – 081319789181
  • Ki Bagus Hadi Kusuma – JATAM Head of Campaign – 085781985822