GOVT TO BEGIN MASS PRODUCTION OF ELECTRIC CARS IN 2014

By Andi Abdussalam

Jakarta, July 24 (ANTARA) - After several trial runs and following a minister driving a 'home-made' electric car, the government decided on Monday to begin mass production of electric autos in 2014.          To that end, the government will soon set up an electric automotive technology development center, issue regulations on incentives, and establish other facilities for manufacturers that would boost production of electric cars.          The incentives will be in the form of import duty exemptions and free value added taxes for the main components of electric autos, such as batteries.          "We have decided to set up an electric automotive and technology development center to boost the production to 10,000 electric cars in 2014," the Coordinating Minister for Economic Affairs said on Monday.          Coinciding with the Nation's Technology Awakening Day, the government will hold a show in Bandung, West Java on August 30, 2012, to display products that have successfully been produced, such as cargo transportation vehicles, buses, city cars and others.          The Indonesian Institute of Sciences (LIPI) has produced various types of electric buses and city cars with models included at scale 7 of the nine technology readiness levels. The technology center will become the main design of electric auto components produced by Indonesians.          "The center will be under the direction of several government institutions, namely the Research and Technology Ministry, Industry Ministry, Transportation Ministry and the Ministry of State-owned Enterprises," Hatta said after attending a meeting with government officials to discuss the nation¿s electric car program.          This is the team that will take full responsibility for the implementation of the program until mass production begins, hopefully by 2014.          "We will act faster and, if possible, mass production will be running well by 2014. We have to provide incentives and legal protection for the industry, which will be developed through state-owned firms and private companies," said Hatta.          Minister for state enterprises Dahlan Iskan said earlier that Indonesia hoped to start mass production of electric cars in 2013.          However, certain necessary regulations are needed before mass production begins, as electric cars use no oil fuel or cylinder engine, said Dahlan, who has recently been driving an electric car to his office.          Regulations are needed, such as for motor vehicle licenses, taxes and certificates of ownership, he said after driving an electric car in a trial test from the workshop in Depok to the office of the research and technology minister in Jakarta, covering a distance of around 25 kilometers.          Earlier, the government was urged to provide incentives for development of electric cars to be included in the policy of  "low carbon emission project" (LCEP).           Leading automotive observer Suhari Sargo said that in order to lure investors, the government needs to offer attractive incentives. "If successful, the national car product will be the trend setter for the development of cars with low emissions to support the LCEP program," Suhari said.           The success in the implementation of the project will largely depend on the availability of local components.  In addition, there should be after sales services provided by producers.          Marketing is not easy as most people still favor conventional cars that include the availability of supporting facilities, according to the automotive observer.          Further, electric cars could be a second alternative, especially for use as city transport, he said.       It is noted that the opportunity for electric cars in the market is increasing due to more expensive fuel costs for conventional cars, he said.          According to Hatta Rajasa, besides regulations on legal protection, the government will also issue regulations on incentives.          The incentives that will be provided will be in the form of import duty exemptions, free sales taxes on luxury goods, tax reductions and free import duties for capital goods imported for the development of electric cars, such as batteries.         "Incentives will be provided for main components, such as batteries, until we are able to produce our own national batteries," the chief economic minister asserted.          The government is planning to develop three types of electric cars, including minivans for public transportation, vehicles for cargo transportation and city cars, with priority of development given to the city cars.          "The production of city cars is relatively easy. We have produced the prototype of the bus, but the problem with it is its battery. The battery can run out of electricity quickly when the bus is traveling on an uphill road. Its electricity system is not reliable. We have to solve this one," Hatta explained.          Regarding prices, the chief economic minister expressed his hope that it would be cheaper than the previous estimate, so that it would serve as a popular car, called "the people's car".          "The price of an electric car should be lower than that of the 'Avanza' minivan, which is used by many circles in Indonesia," Hatta said.          He added that the government has the intention of launching an electric car because it has more potential to be developed on a massive scale than cars that consume fuel oils.          "We call it a national electric car because its 'chip' and 'muscles' are produced by the nation's sons.  We hope its local components will account for 70 percent," he said.          He also said he hoped that with a lower price, which is lower than the Avanza, the electric car will attract the public because it does not use fuel oils. Yet, Hatta has not figured out the price of an electric car because it would be adjusted to the types that the government will develop.          Earlier, Minister Dahlan Iskan predicted that the price of an electric city car, namely the Ahmadi 5.0 trade mark type, would be about Rp200 million each.          At present, besides the prototype of the trademark "Ahmadi Mesin 5.0", which is designed by Desep Ahmaid, four other prototypes of electric cars  have also been produced in the same types as Carry, Avanza, Yaris and Ferrari cars.***2*** (T.A014/INE/KR-BSR/F001) 24-07-2012 18:14:22