Coordinating Minister for Maritime Affairs and Investment Airlangga gives signal that hybrid cars no longer need incentives

Coordinating Minister for Economic Affairs Airlangga Hartarto at the Toyota booth. (Photo: TAM)

JAKARTA - The government has given a signal that it will not return to provide incentives, especially for hybrid technology vehicles. Coordinating Minister for Economic Affairs Airlangga Hartarto assessed that the hybrid vehicle industry in Indonesia has developed well, both in terms of production and sales.

According to Airlangga, the incentive is basically intended to encourage investment, increase domestic production capacity, and strengthen people's purchasing power. However, this condition is considered to have been achieved in the hybrid vehicle industry today.

"Because it has been running, the incentives are full. The incentives are given for national production, and this production is national production, even exported," said Airlangga when visiting ICE BSD City, Tangerang, Friday, August 7.

He added that the performance of the hybrid car market also showed significant growth. Sales of hybrid vehicles are said to have increased by 45 percent, which indicates that consumer interest in the technology remains high even though they do not receive additional incentives such as electric cars.

Unlike electric vehicles, which in certain periods receive value added tax (PPN) incentives borne by the government, hybrid cars currently do not receive similar incentive schemes. Even so, its sales growth still shows a positive trend.

Previously, hybrid cars had received incentives in the form of Luxury Goods Sales Tax (PPnBM) borne by the government in 2025. The amount of the incentive reached 3 percent and was valid until December 2025.

Without PPnBM incentives this year, hybrid car sales actually recorded better performance compared to the same period last year. Based on data on wholesales or distribution from the factory to dealers, hybrid car sales throughout January-June 2026 reached 42,366 units.

This figure is significantly increased compared to the first semester of 2025 which recorded a distribution of 28,817 units. Thus, the hybrid vehicle market is considered to have a strong enough foundation to develop independently.

The government also assesses that the regulatory policy and the current tax rate structure are sufficient to support the development of hybrid vehicles. Moreover, the market for vehicles with this technology has been formed and demand continues to grow.

"Production is good, the increase (in hybrid car sales) is 45 percent. The government's goal of increasing local content has been achieved," said Airlangga.