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Nickel plan sidelined as govt pushes EV market with new incentives
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A driver uses an electric vehicle charging station in Malang, East Java. (Antara/Ari Bowo Sucipto)
I
ndonesia, trailing its neighbors in the electric vehicle (EV) race, is stepping on the gas with a package of tax incentives aimed at revving up its domestic industry, a government official has said.
The revised presidential regulation published on Dec. 12 offers a two-year window for automakers willing to build EV plants in the archipelago.
A ministerial regulation governing the technicalities will be released by the end of December.
Through the policy changes, the government will allow any automaker planning to set up EV plants in the country to import fully built-up (CBU) or completely knocked down (CKD) EVs without paying import duties or luxury goods value-added tax (VAT).
Valid until the end of 2025, the exemptions are aimed at jump-starting the market before domestic production kicks into a higher gear.
Moreover, the government has also loosened the reins on local content requirements. It now gives EV carmakers until 2026 to achieve the minimum 40 percent of domestically sourced components.
“It's a win-win for both Indonesia and investors,” Deputy Coordinating Maritime Affairs and Investment Minister Rachmat Kaimuddin said on Friday, expressing the hope that the new incentives would lure major EV automakers to set up shop in the country.
