Indonesia’s automotive industry experienced a historic transformation in 2025. Electric vehicle sales reached record highs, signaling a decisive shift in consumer preferences toward cleaner and more efficient mobility. This momentum reflects not only lifestyle changes but also a structural reorientation of the national automotive sector.
Key Facts & Background
- Sales Growth:
- Total electric vehicle (EV) sales in 2025: 175,144 units, up from 103,228 units in 2024.
- Battery Electric Vehicles (BEV): 103,931 units, more than double the previous year.
- Hybrid Electric Vehicles (HEV): 65,943 units.
- Plug-in Hybrid Vehicles (PHEV): 5,270 units, a sharp rise compared to 1,324 units in 2020.
- EV market share rose from 11.9% in 2024 to 21.8% in 2025.
- Decline of Conventional Vehicles:
- Internal Combustion Engine (ICE) vehicles sold: 628,543 units in 2025, down from 762,495 units in 2024.
- ICE market share fell to 78.2%, compared to 88.1% the year before.
- From nearly 100% market share in 2020, ICE vehicles now face significant erosion.
- Industry Response:
- Automakers urged to shift marketing strategies from purely environmental messaging to value-driven approaches.
- Competitive pricing and operational efficiency highlighted as key consumer priorities.
- Government requires minimum 40% local content (TKDN) for EVs to strengthen competitiveness.
- Localization of supply chains seen as critical to offset VAT increases to 12% and currency fluctuations.
Strategic Insights
The surge in electric vehicle sales in 2025 marks a turning point for Indonesia’s automotive industry. Consumers are increasingly drawn to the efficiency, modernity, and long-term cost benefits of EVs, pushing manufacturers to rethink product lines and strategies. The rapid growth of BEVs, alongside steady demand for hybrids, demonstrates that the ecosystem for electric mobility has matured, supported by rising consumer confidence and government policy. This shift is not merely incremental—it represents a technological disruption that is reshaping the competitive landscape.
For Indonesia, the challenge lies in ensuring that this momentum translates into sustainable industrial growth. Strengthening local supply chains and meeting TKDN requirements will be vital to keeping EV prices accessible while reducing reliance on imports. At the same time, automakers must balance affordability with innovation, offering products that deliver tangible value beyond environmental benefits. If these strategies succeed, Indonesia could accelerate its transition toward green mobility, positioning itself as a regional leader in the electric vehicle market while reducing dependence on fossil fuels.