Indonesia‘s Electric Vehicle Import ‌Incentives Set to‌ Expire, No Extension Discussions Underway

Jakarta, Indonesia ⁤ – Indonesia’s Ministry of ⁤Industry has confirmed that discussions ‌regarding the extension of import‍ incentives for electric vehicles (EVs) have not yet ​begun,⁣ signaling the policy will conclude ‌as scheduled in December​ 2025. The⁢ current incentives, ‌outlined in Minister of⁣ Investment Regulation Number 6 of 2023, as amended by Number 1 of 2024, have been instrumental in lowering the ‌cost of imported EVs for indonesian consumers.

Mahardi Tunggul Wicaksono, director of Maritime Industry, Transportation and Defense Equipment at ​the Ministry of industry, stated definitively that no inter-agency meetings have been held ⁣to address the continuation of the⁤ program. >”to date,we have not ⁣had any meetings or discussions with othre⁤ relevant goverment‍ ministries regarding the sustainability of these incentives,”< Tunggul said during a forum at the Ministry of Industry office in South Jakarta on Monday.The existing policy allows manufacturers importing Entirely Built Up (CBU) EVs to bypass full import duties and luxury goods taxes, making electric cars more accessible to a wider range of buyers. However, this benefit comes with meaningful commitments from the manufacturers.these commitments include a financial guarantee - a bank deposit equivalent to the suspended import duties and taxes - ensuring the government's financial interests are protected. Should a manufacturer fail to meet pre-agreed investment obligations or establish local production facilities, the government reserves the right to claim this guarantee. Several EV brands, including BYD and VinFast, are currently benefiting from the incentive program and are concurrently investing in establishing manufacturing plants within Indonesia. A key requirement for continued benefit is adherence to a 1:1 production ratio. >“From January 2026 to December 2027, these manufacturers ⁤must begin fulfilling a‍ production commitment of 1:1,”< Tunggul explained. This means for every⁢ EV ⁢previously imported under the incentive, the manufacturer must produce an equivalent number of vehicles within Indonesia. The impending expiration of ‌the incentives raises questions about the⁢ future affordability of imported EVs in the Indonesian ​market. While the government's focus appears to be shifting towards fostering domestic EV production, the short-term impact on consumers and ⁤the ‌ongoing ​investments of companies like BYD and VinFast will be closely watched. The lack of current discussion suggests a potential policy shift,‍ prioritizing ‍local manufacturing over import benefits. (ily/hns)

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