Volkswagen plans to build a $5 billion electric vehicle production and battery manufacturing plant as part of its strategy to build an EV supply chain in Indonesia.
According to a report from Indonesian media outlet Kumparan, the Indonesian government confirmed the investment from the German automotive OEM that will begin a feasibility study to build the EV factory in the country.
VW has determined a location for the factory but has not revealed the details and construction is slated to begin later this year, the report said. The factory is designed to supply the component batteries for future EVs but will also produce electric cars in the future.
VW is one of several automotive OEMs accelerating investment into EV infrastructure and building new factories to meet presumed demand for EVs as consumer interest grows and government mandates call for more EVs on the road to help curb climate change.
Demand for EVs is accelerating. After a record breaking 2022 where more than 10 million electric cars were sold globally. Sales will surge further this year with nearly one in five cars that will be sold will be an electric model, according to the International Energy Agency (IEA).
Earlier this year, VW said up to eight out of 10 cars sold in Europe will be EVs by 2030 and has a target of 55% in North America by the same time. VW plans to launch 10 new EV models by 2026 including a model under $25,000. Additionally, the company will invest $5 billion in electrification plans in North America and another $1 billion in South America.
