Indonesia’s electric vehicle (EV) import incentives are set to expire by December 2025, signaling a shift in government strategy toward domestic manufacturing. The move could raise prices of imported battery electric vehicles (BEVs) by up to 40%, according to automotive experts. As the market matures, policymakers are recalibrating support to strengthen local industry capacity.
Key Facts & Background: Under Ministerial Regulation No. 6/2023 jo No. 1/2024, the government waived import duties and luxury sales tax (PPnBM) for fully built BEVs starting February 2024. Participating automakers were required to submit bank guarantees and commit to producing EVs locally at a 1:1 ratio. The incentive program ends December 2025, with post-2026 policies mandating compliance with domestic content (TKDN) targets—40% in 2026, rising to 80% by 2030.
Strategic Insights: The phase-out of EV import subsidies marks a pivotal transition from market stimulation to industrial consolidation. While the incentives successfully introduced BEVs to Indonesian consumers, the next phase prioritizes value chain localization and manufacturing resilience. Experts argue the “trial phase” has served its purpose, and future competitiveness hinges on scaling domestic production. Automakers must now accelerate factory development to avoid tariff shocks and meet TKDN thresholds. This policy shift aligns with broader goals of energy transition, job creation, and technological sovereignty—positioning Indonesia as a regional EV manufacturing hub in the long term.