Indonesia Boosts Small Industries’ Role in EV Supply Chains

RRI.CO.ID, Jakarta - The Ministry of Industry continues to strengthen the involvement of small and medium industries (IKM) in developing the battery-based electric motor vehicle (KBLBB) ecosystem, particularly for electric two-wheelers. The strategic effort is aimed at ensuring that the transition to electric vehicles not only expands the market for finished products, but also fosters the growth of the domestic component industry, increases local added value, and creates jobs.

Minister of Industry, Agus Gumiwang Kartasasmita, emphasized that the development of the electric vehicle industry should generate broad multiplier effects across the national industrial structure, including creating opportunities for small and medium industries to become part of the supply chains of large manufacturers. Therefore, IKM development should go beyond improving production capabilities and enable businesses to meet the qualifications required to become industrial suppliers.

“Our goal is not simply to increase the number of IKM receiving development support, but also to ensure they meet industry requirements. IKM must be able to qualify as suppliers, enter the supply chain, and ultimately secure sustainable orders,” the Minister said in Jakarta on Tuesday, August 18, 2026.

The initiative has begun to produce tangible results. Two IKM supported by the Ministry of Industry, PT Kannindo Metal Industri and PT Multikon Rekatama Industri, have become part of the supporting ecosystem for Indonesia’s national electric motorcycle program (MoLiNas), launched by President Prabowo Subianto on August 13, 2026, in Cikarang.

The two IKM are now capable of producing battery boxes and battery brackets for the Alva MoLiNas, manufactured by PT Electra Mobilitas Indonesia. Their achievement demonstrates the significant opportunity for domestic IKM to play a larger role in the electric vehicle supply chain, provided they receive support to improve technology, quality, productivity, and market access.

Through the Directorate General of Small, Medium and Miscellaneous Industries (IKMA), the Ministry of Industry has implemented various programs to develop component manufacturers for transportation equipment. These include identifying potential IKM, improving technological capabilities and quality, developing prototypes, conducting testing and certification, and integrating IKM into electric vehicle industry supply chains.

The Minister explained that IKM development within the electric vehicle ecosystem follows a supplier development approach, with the needs of major manufacturers and original equipment manufacturers (OEMs) serving as the starting point for development programs.

Under this approach, the capabilities of local IKM are mapped and matched with the component requirements of the electric vehicle industry. Potential IKM then undergo supplier-readiness assessments to identify capability gaps that need to be addressed.

“The assessment covers various aspects, including technology, quality, production capacity, engineering, certification, productivity, costs, and delivery performance. This allows development interventions to be more precisely targeted,” Agus said.

According to the Minister, an industry-demand-based development model is essential to ensure that IKM capacity-building programs have a clear market orientation. “IKM development must start with market demand. OEMs and Tier-1 suppliers communicate their requirements and standards, after which the government provides support to help IKM close those gaps through improvements in technology, human resources, product quality, standardization, and access to testing,” he said.