TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsRI faces rough road in phasing out EV imports at turn of year
The government has said it will not renew the incentive scheme, which since 2024 has allowed automakers to import completely built-up (CBU) EVs without paying import duties, luxury tax or value-added tax (VAT).
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Making its debut in Indonesia, Vietnam’s VinFast will build a local electric vehicle (EV) manufacturing plant with a projected capacity of 50,000 cars annually. (Courtesy of VinFast)
A
s Indonesia prepares to end duty-free import incentives for electric vehicles to boost local production at the start of next year, experts warn that the transition could be tougher than policymakers expect. They caution that automakers may struggle with a tight timeline and limited battery supply, raising the risk of production bottlenecks in an automotive market already showing signs of slowdown.
“I understand if this is part of the government’s policy [to end the incentive], but building a car plant is not as easy as flipping a hand,” automotive expert Bebin Djuana told The Jakarta Post on Monday.
“A conventional plant usually takes 18 to 24 months to build, and EV factories take even longer because they are far more advanced. I’m skeptical they can be fully operational within the time they have.”
He cautioned that if the government sticks with the current policy, some brands could face supply disruptions next year, as the shift from imports to local production “might not transition smoothly,” potentially cutting sales in an already sluggish market where both consumer spending and car-buying appetite remain weak.
Beyond construction, automakers must secure local supply chains, train workers and run production trials, Bebin added, meaning they would likely begin with small production batches before ramping up.
The government has said it will not renew the incentive scheme, which since 2024 has allowed automakers to import completely built-up (CBU) EVs without paying import duties, luxury tax or value-added tax (VAT), provided they committed to building manufacturing plants in Indonesia.
“Insya Allah [God willing], we will no longer issue CBU import permits under the investment incentive scheme,” Industry Minister Agus Gumiwang Kartasasmita told reporters during a local content briefing on Thursday.
