In Order To Withdraw More Investment, The Government Revises The TKDN Target On Electric Vehicles

Illustration. (Photo: Doc. Antara)

JAKARTA - The government revised the target value of local content or the level of domestic components (TKDN) on the assembly of battery-based electric motorized vehicles (KBLBB) in order to attract more investment and accelerate the KBLBB market in Indonesia.

Director of the Maritime Industry Transportation Equipment and Defense Equipment of the Ministry of Industry, Hendro Martono, at a press conference in Jakarta on Friday, March 1, said the calculation of the TKDN value was at least 40 percent, previously pegged until 2024, extended until 2026.

Furthermore, TKDN composition rose to a minimum of 60 percent in 2027-2029, and a minimum of 80 percent in 2030 and so on.

"The calculation of local content or TKDN for electric vehicles is proposed to be changed to: in the 2020-2029 period, for the main components of 50 percent, while in 2030 it will increase to 60 percent," said Hendro, quoted from Antara.

Based on the calculation scheme, the TKDN weight for supporting components remains 10 percent. Meanwhile, TKDN's weight for development and research activities will be lowered from 20 percent to 10 percent by 2030.

On the other hand, the TKDN's weight for assembly components actually rose from 10 percent to 20 percent.

Hendro explained that the TKDN calculation was carried out through three stages. First, the creation of the market until 2026 to attract new investment through the assembly of KLBB in complete decomposed form (completely knocked down/CKD),

Second, industrial penetration in 2027-2029 is carried out by requiring the use of battery packages and modules for the domestic KBLBB industry.

Third, industrial deepening in 2030 and so on by requiring the use of the main components, namely batteries cells from within the country.

"So the government makes adjustments to the TKDN calculation in terms of painting and connection so that the KBLBB industry can more easily reach the proportion of TKDN value in the assembly aspect to the maximum," said Hendro.

The government provides various incentives for the electric vehicle industry. Incentives provided include tax holidays or corporate income tax exemptions for companies that produce KBLBB.

Then, tax allowance or reduction of corporate income tax for companies that invest in the KBLBB industry and 0 percent import duty incentives for the import of KBLBB components.

Incentives are also given to consumers who buy two-wheeled electric vehicles in the form of discounted prices of IDR 7 million per unit.