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Laying the foundations for vehicles of the future

Indonesia's focus on developing infrastructure, improving connectivity, boosting tourism and moving towards Industry 4.0 lays the foundation for the future of its electric car sector.

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Grab Indonesia is a driver of Softbanks' US$2 billion investment to boost Indonesia's electric car sector.

EARLIER in August, Indonesian President Joko Widodo signed a decree to support the electric vehicle sector, noting that production should leverage the raw materials present in the country.

Indonesia has been hoping to create a downstream industry of nickel laterite ore, which is used in lithium batteries. Metals such as cobalt and manganese - which are used in the construction of batteries - are present in Indonesia and can give it an edge with lower production costs, he notes.

Indonesia aims to reduce its reliance on imported oil and compete with Singapore and Thailand in the electric car sector too. Production of electric vehicles is expected to start by 2022. By 2025, it should be 20 per cent of total car production.

GRABBING FOR A SHARE OF THE PIE

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Things are underway as investments have already been secured for the electric vehicle sector. These include US$2 billion of investment from Toyota Motor Corp to build hybrid-vehicle plants and US$1 billion from Hyundai Motor to build two plants, including an electric vehicle unit.

Another US$2 billion has been secured from Japan's Softbank Group Corp, which will be invested via Grab Indonesia over a five year period across various sectors, one of which is for the electric vehicles sector.

"This investment will be a driver of the digitisation of crucial services and infrastructure. Our commitment is to create next-generation transportation networks for cities and transforming how critical services like health care are delivered, as well as building an electric vehicle ecosystem in the country," says Ridzki Kramadibrata, president of Grab Indonesia.

The fifth unicorn - a privately-held startup valued at more than US $1 billion - of Indonesia believes in "creating tech for good", and is committed to pursuing innovations and technology to further drive the transport ecosystem.

It also aims to develop solutions and services that improve the livelihoods of millions in Indonesia, by increasing access to financial services, providing better income opportunities for marginalised and disenfranchised segments of society and creating economic value for gig economy workers.

"Grab operates the largest transport fleet in South-east Asia through our partner drivers, so we see an exciting opportunity to drive the adoption of new technology across the country. We hope our vision of 'tech for good' would lead to more people embracing and benefiting from the technologies available, leading to increasing financial inclusion and more small businesses created," says Mr Kramadibrata.

Grab also sees opportunity in the government's plan to develop new tourism destinations as it can offer its ridesharing services, as well as give local entrepreneurs a chance to provide food and beverage services using Grab's platform and generate another source of income.

Indonesia's aim to become the largest digital economy in South-east Asia in 2020 also complements Grab's business and the services that it provides, moving beyond just ride sharing. Plans are ongoing to build a new headquarters in Jakarta, which will serve as a dual headquarters with Singapore that will focus on developing its GrabFood services and solutions for emerging economies in South-east Asia, says Mr Kramadibrata. It has also mooted the concept of GrabWheels in several locations in Greater Jakarta as a step forward in reducing air pollution.