Ministry Of Industry Pede Electric Vehicles Control The Indonesian Automotive Market In The Next 5 Years

Deputy Minister of Industry (Wamenperin) Faisol Riza. (Photo: Doc. Public Relations of the Ministry of Industry)

JAKARTA - The Ministry of Industry (Kemenperin) is optimistic that electric vehicles will dominate within the next five years.

The Ministry of Industry has also begun to draw up transitional steps from fossil-based industries, then electric or a combination of both.

"We also have to start compiling steps or transitions from fossil-based industries, then electrical or combination of both. This is what the government needs to really think about as a regulator so that the industry does not contract," said Deputy Minister of Industry (Wamenperin) Faisol Riza as quoted from the official website of the Ministry of Industry, Tuesday, December 3.

The Indonesian government is targeting a reduction in emissions in accordance with a global agreement of 43.2 percent. To achieve this, the government has also issued a number of incentives, such as the elimination of the Luxury Goods Sales Tax (PPnBM), 0 percent import duty and Government-borne Value Added Tax incentives (PPN DTP).

"This regulation is designed to encourage investment and accelerate the transition to clean energy. In line with that commitment, the Ministry of Industry carries a multiple pathway approach which is our strategy to achieve that target," he said.

In accelerating the use of electric vehicles, Permenperin No. 36 of 2021 has been implemented. One of the requirements contained is the fulfillment of the Domestic Component Level (TKDN) so that it can take advantage of fiscal and non-fiscal incentives.

"There are many local products that have actually been produced in Indonesia. In fact, some are already close to 40 percent. Therefore, the Ministry of Industry continues to encourage these manufacturers to enlarge their local components," said Faisol.

Meanwhile, during the January-October 2024 period, the two-wheeled motor vehicle industry (KBM) has production performance of 5.8 million units with sales reaching 5.4 million units and CPU exports of 458 units.

Likewise, the four-wheeled KBM industry. This industry shows its positive performance with production increasing by 996,000 units, CBU exports reaching 390,000 units and CBU imports of 80,000 units.

"This figure is equivalent to a growth of 6.7 percent of the total in 2023," he concluded.