Indonesia to suspend electric vehicle incentives next year

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The Minister of Economic Coordination has announced that EV incentives will not be extended until 2026, and that the relevant budget will be shifted to the domestic vehicle program in order to revitalize the local automotive industry and attract investment from car companies.The incentive allowsZero tariff on imported purely complete vehicles (CBU) (formerly 50%), since its launch in February 2024, six companies have participated.

The six companies includeBYD, VinFast, Geely, Xiaopeng, National Assemblers (including Aion, Citroen, Maxus, Volkswagen) and Inchape Indomobil Energi Baru (Great Wall Ola).. The condition for receiving the incentive is that the company must produce an equivalent amount of electric vehicles domestically according to the domestic parts content (TKDN) requirements, with a production obligation period from January 1, 2026 to December 31, 2027, and the government may use bank guarantees to recover the money if the standard is not met.

He noted that the incentives would beDue December 31, 2025, will not be renewed as the government is now focusing on domestic vehicle development and the budget will be used for the program andBuilding on the VinFast experience. He also emphasized that car companies already taking advantage of EV incentives should honor theBuilding CommitmentThe existing enterprises and VinFast have already started to invest in the construction of factories, and other enterprises that have not set up factories need to follow the example of VinFast to synchronize the progress.Investment and Production LayoutThe

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