FLEETDRIVE
INDONESIA As Southeast Asia’ s most populous country, Indonesia is aiming for at least 2 million EVs and 12 million two-wheel vehicles by the year 2030. Reducing carbon emissions are the name of the game, as the archipelago largely attributes its current air pollution problems to vehicle emissions. Furthermore, the Indonesian government also aims to achieve net-zero emissions by the year 2060.
Moreover, Indonesia has a lofty goal of becoming a global EV battery manufacturing hub. The country is known for its large nickel reserves, which gives them an advantage in the EV battery market. Several manufacturers built their own battery and vehicle plants in partnership with the Indonesian government. Southeast Asia’ s first EV battery factory was inaugurated in Indonesia in September of last year.
Similar partnerships between the government and private corporations include a project to install more EV charging stations. Indonesia’ s state electricity company PLN and EV giant BYD announced this collaboration in December last year.
Government efforts also include several tax incentives for both local and foreign EV manufacturers. The first is a reduced Value- Added Tax( VAT) when buying locally assembled EVs. The policy, which began April 2023, cuts the 11 per cent VAT rate to 1 per cent. It should be noted, however, that this tax deduction is only applied to vehicles from facilities with at least 40 per cent local content. Companies like Hyundai and Wuling have facilities that meet this requirement, thus both company and consumer benefit largely from purchasing EVs from them. The tax deduction resulted in a 104.13 per cent increase in EV sales in 2024 compared to 2023.
Aside from a VAT reduction, the Indonesian government also offered benefits for foreign EV makers. Foreign EV makers who commit to building a facility in Indonesia by 2026 can enjoy 0 per cent import duty tariffs on their completely built-up( CBU) and completely knocked down( CKD) EVs. BYD announced its commitment to build a plant in Indonesia by the year 2026, effectively taking advantage of this tax program.
Due to this, the presence of EVs in Indonesia
ISSUE 52 APRIL 2025 / WWW. AFMA. ORG. AU 9