The Ministry Of Industry Will Evaluate Electric Car Incentives, The Amount Of Sales Is Still Far From Target

JAKARTA - The Ministry of Industry (Kemenperin) will evaluate the provision of incentives for electric cars which will start ending in December 2025. The evaluation is carried out because the absorption of this type of vehicle is still far from the target set.

Based on Regulation of the Minister of Industry (Permenperin) Number 6 of 2022, the government has a quantitative target of developing the battery-based electric vehicle industry (KBLBB) of 400,000 units throughout 2025 and will be increased to 600,000 units in 2030.

As for April 2025, the total population of KBLBB has only reached 64,409 units, based on data from the Ministry of Transportation's Type Test Registration Certificate (SRUT).

"Of course we evaluate because several incentives will also end in 2025, including imports of BEV as an effort to achieve roadmaps that have been established through cross-ministerial coordination," said Director of Maritime Industry, Transportation Equipment and Defense Equipment of the Directorate General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) Ministry of Industry Mahardi Tunggul in a media discussion entitled "Maintaining the Effectiveness of Automotive Incentives" at the Ministry of Industry building, Jakarta, quoted Tuesday, May 20.

Evaluation also targets the provision of stimulus to other types of vehicles to achieve the decarbonization target. However, he said, it must be in line with the depth of the industry through the realization of the Domestic Component Level (TKDN).

"With the regulatory framework set, motor vehicle industry players who meet the TKDN requirements are entitled to receive various forms of incentives. This is part of a strategy to build an independent and competitive automotive industry," he said.

Currently, the government has provided incentives through a stimulus package to boost the adoption of four-wheeled KBLBB, starting from reducing 10 percent VAT, exemption from import duties (CBU) and Luxury Goods Sales Tax (PPnBM) with investment commitments.

For the hybrid segment, both minor hybrid and plug-in hybrid (PHEV) also get a 3 percent tax cut for PPnBM in the 2025 budget, as long as they meet the requirements for localization and use of TKDN.

Meanwhile, the General Secretary of the Association of Indonesian Automotive Industries (Gaikindo) Kukuh Kumara welcomed the evaluation plan, as part of support for boosting national car sales in the country.

This is because, Kukuh assessed, the provision of incentives will affect the increase in vehicle absorption, especially in the new energy segment or electrification. Moreover, he said, this is a lesson from the expansion of PPnBM incentives during the COVID-19 pandemic.

"If you look at the numbers, the potential loss (of the state) to provide incentives with an increase in the number of vehicle sales during the pandemic is quite successful. The national automotive industry can rise and it turns out that it makes people's purchasing power better," he concluded.