Minister of Industry Agus about EV Incentives: Prioritize National Brand Cars

Illustration - PT PLN EPI employees use electric cars. ANTARA/HO-PT PLN EPI. (Photo: Doc. Antara)

JAKARTA - Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said the government would prioritize the provision of incentives for electric vehicles or electric vehicles (EV) for national brand cars as part of efforts to strengthen the domestic automotive industry.

"We will prioritize national brand cars," said Agus as quoted by ANTARA, Thursday, July 30.

However, when asked further, Agus did not explain whether the incentive would also be given to electric vehicle manufacturers that are already operating in Indonesia.

The government has also not detailed a number of aspects of the policy, including the definition of "national brand cars", whether it refers to brands owned by Indonesian companies or also includes vehicles with high levels of domestic components (TKDN) produced in Indonesia.

The government has also not confirmed whether the incentive will only be given to national brands or will still include foreign brands produced in Indonesia, as well as when the incentive scheme will be announced.

In the Macro Economic Framework and Fiscal Policy Elements (KEM-PPKF) 2027, the government included the development of national cars and motorcycles as one of the National Priority Work Programs (PKPN) on the agenda of industrialization and industrialization.

In the document accessed on July 30, 2026, it was explained that the development of national cars was aimed at strengthening the independence of the automotive industry, increasing the added value of the manufacturing sector, strengthening the domestic supply chain, and creating more qualified jobs.

The program is also expected to reduce dependence on vehicle imports through increasing local content while improving the trade balance.

However, the government assesses that challenges that still need to be overcome include achieving efficient production scale, the effectiveness of technology transfer, and increasing product competitiveness in both domestic and global markets.

As part of the development of the national car ecosystem, the government plans to build a special industrial area for national cars covering an area of around 412 hectares in Subang, West Java.

In 2026, the project has entered the pre-feasibility study and prototype design stages.

The KEM-PPKF 2027 document also states that funding for the national car project in the medium term is expected to come from the state budget and the private sector, with cross-ministerial support in the development of its industry ecosystem.

In addition to national cars, the government is also developing a national electric motorcycle program that is focused on strengthening the independence of the automotive industry and the country's operational needs.

This project focuses on the development and production of electric two-wheeled operational vehicles for tactical needs, with PT LEN as the main cross-ministerial implementer.

"As of April 2026, the project has reached a distribution of 3,000 units nationwide, with phase 1 completed and phase 2 in the final stage of the contract," the document said.

The government assesses that the national motorcycle program has the potential to encourage import substitution, increase the local content and supply chain of the electric vehicle industry, and strengthen the contribution of the manufacturing sector to economic growth and employment.