Tag: Policy

  • Jakarta reviews odd-even rule as Leapmotor warns over EV exemption

    Jakarta reviews odd-even rule as Leapmotor warns over EV exemption

    Top image: Photo: Serenity, CC BY-SA 3.0, via Wikimedia Commons

    Jakarta’s provincial government is reviewing its odd-even (ganjil genap) traffic restriction, and the question of whether battery electric cars should keep their exemption from it is now firmly on the table. Carmakers are watching closely: for many Jakarta buyers, being able to drive on any day regardless of number plate is one of the most tangible everyday perks of owning an EV.

    What is being reviewed

    The odd-even scheme, which limits private cars on major corridors to alternate days based on the last digit of their plate, has been in place for roughly a decade. At the end of September the Jakarta Transportation Agency (Dinas Perhubungan) held a focus group discussion on the policy. According to Suara.com and Liputan6, the review is looking at emissions, economic and environmental effects, and how vehicles are classified by fuel or power source.

    Agency head Budi Awaludin stressed that the discussion was only about gathering public input and that further study is needed before anything changes. No decision has been announced on the EV exemption. In early October, Jakarta DPRD member Muhammad Taufik Zoelkifli (PKS) also said the policy, which dates from 2016, should be evaluated with more attention to its economic impact, Kumparan reported.

    The review is a shift in tone from May, when the agency’s then head, Syafrin Liputo, said the province would keep the odd-even exemption for battery EVs, alongside its exemptions from regional vehicle tax (PKB) and title-transfer duty (BBNKB), according to the National Police news portal. That followed a national interior ministry regulation (Permendagri 11/2026) which stopped treating EVs as automatically exempt from those regional taxes, leaving each province to decide. Our guide to EV taxes and incentives in 2026 explains how those levies work.

    Leapmotor: removal would hit demand

    Speaking at a media event near Bogor on 20 October, Leapmotor Indonesia brand head Samuel Christian Wowor said the exemption is one of the triggers that persuade consumers to switch to an electric car, so removing it would inevitably affect the market. He also argued that people who bought EVs on the basis of the current rules should be considered in any change (Suara.com).

    “For our part, we will of course simply follow whatever government regulations are in force.”
    — Samuel Christian Wowor, Leapmotor Indonesia, to Suara.com (translated from Indonesian)

    Local content push could also affect prices

    At the same event, Wowor said Leapmotor aims to lift the local content (TKDN) of its locally assembled cars from 40% to 60% by 2027, in line with the government’s requirement. The company is still studying which parts to localise, with the battery among the options, and said the investment needed could end up reflected in vehicle prices, Suara.com reported. The B10 and C10 are currently listed at Rp 499 million and Rp 618 million on the road in Jakarta, and are assembled by PT National Assemblers. BYD has set out a similar 60% target for its Subang plant.

    What it means for buyers

    • Nothing has changed yet. Battery EVs remain exempt from Jakarta’s odd-even rule while the study continues.
    • Do not rely on the perk for the long term. If daily access to odd-even corridors is a major reason for buying an EV, factor in that the exemption is under review and could be narrowed.
    • Watch local-content timelines. Brands moving from 40% to 60% TKDN by 2027 have warned that localisation costs could push prices up, although none has announced an increase.

    Update, 23 October: Industry Minister Muhammad Sarmuji has proposed extending odd-even exemptions and other perks to hybrids, PHEVs and REEVs. Read our follow-up.

    Update (27 October 2026): Periklindo chairman Moeldoko says the EV exemption could be dropped once EVs reach about 30% of vehicles. Read our follow-up.

    Explainer: how the rule works, which roads and vehicles it covers and what the review could mean for buyers, in our guide to Jakarta’s odd-even rule and EVs.

    Sources: Suara.com (30 Sept); Liputan6 (30 Sept); Kumparan (21 Oct); Suara.com (21 Oct, odd-even); Suara.com (21 Oct, TKDN); Tribratanews Polri (5 May).

  • BYD says Subang-built EVs already top 40% local content, eyes 60% for 2027

    BYD says Subang-built EVs already top 40% local content, eyes 60% for 2027

    Top image: Photo: Alex Neman, CC BY-SA 4.0, via Wikimedia Commons. Pictured: a BYD M6 in Surabaya; the M6 is one of three BYD models now built at the Subang plant.

    BYD Motor Indonesia says the cars rolling out of its new factory in Subang, West Java, already exceed 40% local content, and that it is confident of clearing the higher 60% threshold that Indonesia’s electric-vehicle rules set from 2027.

    The comments, made by Luther Panjaitan, BYD Indonesia’s head of public relations and government relations, at a press event in South Jakarta and reported by Suara.com on 19 October, are the clearest signal yet that the market’s best-selling EV brand intends to keep its models eligible for incentives once the local-content bar rises.

    What BYD said

    According to Suara.com and an earlier interview with KatadataOTO, Panjaitan said:

    • Units produced at BYD’s own Indonesian facility already have local content (TKDN) of more than 40%.
    • Three models are now made locally: the Atto 1 city car, the M6 EV and the M6 DM plug-in hybrid. BYD said localising these models was a response to demand and would speed up deliveries to dealers.
    • Because the Subang plant has its own stamping, welding, painting and assembly lines, the company says it has the flexibility to raise local content further.

    Panjaitan argued that owning a factory is currently one of the most realistic ways for a carmaker to reach 60%. “We are very confident and will meet the government’s request to reach that target as soon as possible,” he said (translated from Indonesian, via Suara.com).

    KatadataOTO also reported that one model from BYD’s premium Danza line-up will be assembled at a BYD facility in future, although no timing was given.

    The Subang plant

    The factory, in the Subang Smartpolitan industrial park, was inaugurated on 3 September. At the opening, BYD Indonesia president director Eagle Zhao said it can build up to 150,000 vehicles a year, that more than 5,000 local workers had already joined the company with a target of around 20,000, and that BYD was aiming to reach 60% TKDN from January 2027, Republika reported. Zhao also said BYD planned to carry out some battery-related assembly work in Indonesia, but gave no details of capacity or timing.

    What the rules require

    Local-content requirements for battery EVs are set by Presidential Regulation 79 of 2023. As summarised by KatadataOTO, the minimum is 40% for 2022–2026, rising to 60% for 2027–2029 and 80% from 2030. (Suara.com’s report describes the 60% stage as covering 2027–2028; we have followed the regulation’s dates as reported by KatadataOTO.)

    BYD is not the only route to compliance. As we reported last week, the Ministry of Industry says brands could also reach 60% by using batteries from Indonesian producers, without needing to build their own plants. The ministry has also reaffirmed that the 60% rule will start in 2027.

    Why it matters

    BYD’s locally built Atto 1 topped EV wholesales in September with 4,840 units, ahead of the Jaecoo J5 EV (3,276) and Geely EX2 (1,890), according to Gaikindo figures cited by KatadataOTO. Keeping that model compliant is therefore important both for BYD’s volumes and for the wider market (see our January–September EV sales round-up).

    What it means for buyers

    For now, nothing changes at the showroom: the Atto 1, M6 EV and M6 DM are already built in Subang. The bigger question is 2027. Models that cannot show 60% local content may lose access to tax incentives, which could push up prices, while brands with Indonesian plants, or access to Indonesian-made batteries, should be better placed to hold prices steady. Buyers weighing an imported EV against a locally built one may want to ask dealers how each model will be treated after January 2027. Current BYD prices and models are listed in our EV directory entry for BYD.

    Update (3 November 2026): The National Economic Council has since said the 60% requirement will apply from 2027 together with locally assembled battery packs. Read our follow-up.

    Sources: Suara.com (19 Oct 2026); KatadataOTO (16 Oct 2026); Republika (3 Sep 2026).

  • Indonesia weighs halt to new semi-finished nickel smelters amid glut

    Indonesia weighs halt to new semi-finished nickel smelters amid glut

    Top image: Photo: Famhar1968, CC BY-SA 4.0, via Wikimedia Commons

    Indonesia is considering a halt to the construction of new nickel smelters that make semi-finished products, as a global surplus drags down prices of the metal at the heart of many electric vehicle batteries. The idea was raised by Bahlil Lahadalia, Coordinating Minister for Downstreaming and Energy Transition and Minister of Energy and Mineral Resources, and it has not yet become policy.

    What the minister said

    Speaking to reporters on the sidelines of the Investor Daily Summit in Jakarta on 7 October, Bahlil said that roughly 50–60% of the smelters now operating turn out semi-finished nickel, and that the government was weighing a moratorium on new plants of this kind while it pushes industries that make finished downstream products instead, according to Koran Jakarta, citing Antara. He said the option would be reported to President Prabowo Subianto.

    “This is oversupply, which is why prices are falling.”
    — Bahlil Lahadalia, reported by Koran Jakarta and CNBC Indonesia (translated from Indonesian)

    Bahlil tied the move to a surplus of about 2.5 million tonnes, CNBC Indonesia reported. detikFinance noted that the unit behind that figure was not spelled out in his remarks, so it should be treated with some caution.

    Which products could be affected

    Reports differ on the scope. The Antara-based report in Koran Jakarta lists ferronickel, nickel pig iron (NPI), nickel matte and mixed hydroxide precipitate (MHP) as Indonesia’s main semi-finished products. The South China Morning Post mentions NPI and nickel matte specifically. That distinction matters for the EV supply chain: NPI goes mostly into stainless steel, while matte and MHP are intermediate feedstocks for battery materials. Until the government publishes a rule, it is not clear whether battery-grade intermediates would be caught.

    The Oregon Group, a resources news site, reported that nickel fell to a 2026 low of US$15,510 a tonne on 2 October. It said Indonesia’s smelters would need about 415 million tonnes of ore a year at full capacity, against expected 2026 ore output of roughly 290 million tonnes. Citing Indonesian Nickel Miners Association (APNI) data via the OECD, it counted 55 RKEF smelters, 10 HPAL plants and 8 nickel-matte plants in the country.

    Industry and investor reaction

    The Indonesian Nickel Industry Forum (FINI) responded this week. Its chairman, Arif Perdana Kusumah, told CNBC Indonesia that the supply-demand balance has shifted sharply since late 2025 and that tighter government supply policy has, in theory, already rebalanced the market. FINI’s figures put Indonesia at about 60% of world nickel supply, with 2.5 million tonnes produced in 2025: 2.05 million tonnes of NPI, ferronickel and matte, and 450,000 tonnes of MHP and nickel sulphate. The forum expects Indonesian processed nickel output to fall by 3.5–4% in 2026, while MHP capacity, driven by HPAL projects, is set to more than double to over 900,000 tonnes by the end of 2027.

    Any freeze would land mostly on Chinese investors. detikFinance, summarising the SCMP report, cited an estimate from the US-based Center for Advanced Defense Studies that Chinese money accounts for about 75% of Indonesia’s nickel refining industry. Nukila Evanty of the Asia Centre said Chinese investors were likely to be significantly affected.

    What it means for EV buyers

    Nothing changes at the showroom for now. The proposal targets new semi-finished smelters, not existing plants, and it is still at the discussion stage. Over the longer term, the government’s stated aim is to move nickel further along the chain towards products such as battery cells, which ties in with the first EV battery export from Weda Bay earlier this month and with the ministry’s plan to let locally made batteries count towards the 60% local-content rule. If battery-grade intermediates are spared and cell-making grows, local supply for Indonesian-assembled EVs could improve. If they are not, battery-material projects could slow. The environmental footprint of the smelter parks, covered in our report on their largely coal-fired power base, is a separate question the proposal does not address.

    Update, 23 October: Chinese producers at the Morowali industrial park are now discussing coordinated output cuts, possibly including battery-grade MHP. Read our follow-up.

    Follow-up (4 November 2026): At Minerba Convex on 2 November, Bahlil said the government is now reviewing permits for new smelters that make only semi-finished products. Read more.

    Sources: Koran Jakarta (Antara), 7 Oct 2026; CNBC Indonesia, 14 Oct 2026; detikFinance, 10 Oct 2026; South China Morning Post, 10 Oct 2026; The Oregon Group, 9 Oct 2026

  • Imported EVs could hit 60% local content with local batteries, ministry says

    Imported EVs could hit 60% local content with local batteries, ministry says

    Top image: Photo: RudolfSimon, CC BY-SA 3.0, via Wikimedia Commons

    Electric car brands that do not build vehicles in Indonesia could still meet the country’s 60% local-content requirement from 2027, provided they use batteries made in Indonesia, the Ministry of Industry (Kemenperin) said on Tuesday 13 October.

    The comments, reported by Suara.com from the ministry’s offices in Jakarta, add a new wrinkle to the tightening TKDN (domestic component level) rules that we covered when the ministry reaffirmed the 60% threshold at the start of the month.

    What the ministry said

    Setia Diarta, director general of metal, machinery, transport equipment and electronics industries (ILMATE) at Kemenperin, said the ministry’s own simulations showed the 60% level was reachable whether or not a brand operates an assembly plant in Indonesia. “So whether you have a factory or not, it is actually possible,” he said (translated from Indonesian).

    He pointed to an unnamed brand that still assembles its cars overseas but already fits Indonesian-made batteries, saying that approach could help it catch up with the local-content target. Suara’s report does not explain how a vehicle assembled abroad would be scored under the TKDN system, and the ministry did not name the brand.

    The timetable

    The requirements come from Presidential Regulation (Perpres) No. 79 of 2023, which revised Perpres No. 55 of 2019 on accelerating battery-electric vehicles. Under it, the minimum local content for battery-electric cars is:

    • 40% for 2022–2026
    • 60% for 2027–2029
    • 80% from 2030

    Patia J. Monangdo, who leads the ministry’s battery-electric vehicle industry working team, said the average TKDN of electric cars in Indonesia is currently around 45–47%, with the best-performing product at 80%. More than 100 electric vehicle products now hold TKDN certificates, he said. On those averages, many models would need to add well over ten percentage points of local content within roughly 15 months (our estimate, based on the ministry’s figures).

    Why batteries matter so much

    The battery is the single most expensive part of an electric car, so localising it moves the TKDN score more than almost any other component. At a separate industry discussion, the same ministry team said batteries were the “crucial topic” for the next stage, Katadata reported. According to Katadata’s account, local battery packaging adds around 10% to a vehicle’s score, locally made housings and wiring harnesses around 20%, and a domestically produced battery management system around 30%, with local cell production also seen as important.

    Not every carmaker is ready. Toyota’s Indonesian manufacturing arm TMMIN, which began building the bZ4X locally in late 2025, said at the end of September that it was still studying whether it could meet the 2027 target, Katadata reported.

    The push lines up with the government’s battery ambitions. Indonesia shipped its first export of EV batteries from the Weda Bay industrial park in North Maluku on 8 October, and officials want more of that output to end up in cars sold at home.

    What it means for buyers

    TKDN is not just an industrial target: it decides which cars qualify for tax breaks. The 40% threshold has been the gateway to government incentives such as VAT relief, according to the ministry, so models that miss the higher bar from 2027 risk losing that support and becoming more expensive. If imported models can qualify through local batteries, buyers could see a wider choice of incentive-eligible cars. Until the ministry publishes how such vehicles would be assessed, though, shoppers should check a model’s current TKDN status before counting on a discount. Our guide to EV tax incentives explains how the current schemes work.

    Update: BYD says its Subang-built models already exceed 40% local content and that it expects to meet the 60% rule in 2027. Read our follow-up.

    Update (3 November 2026): The National Economic Council has since said the 60% requirement will apply from 2027 together with locally assembled battery packs. Read our follow-up.

    Sources: Suara.com (13 Oct 2026); Katadata (30 Sep 2026); GridOto (23 Nov 2025); Antara (8 Oct 2026).

  • Nickel parks’ 15.9 GW power base, mostly coal, raises EV battery questions

    Nickel parks’ 15.9 GW power base, mostly coal, raises EV battery questions

    Top image: Photo: Ministry of Public Works of Indonesia (Kementerian PUPR), Public domain, via Wikimedia Commons

    Indonesia’s two biggest nickel processing hubs now have around 15.9 gigawatts (GW) of power capacity, most of it from coal plants the parks build and run for themselves. Energy experts quoted by Kontan on Sunday 11 October warned that this reliance on so-called captive coal power could weaken the appeal of the country’s nickel and EV battery materials in export markets that increasingly check carbon footprints.

    The debate follows last week’s ceremony at the Indonesia Weda Bay Industrial Park (IWIP) in North Maluku, where President Prabowo Subianto marked Indonesia’s first EV battery exports and the start of 11 industrial projects.

    Where the 15.9 GW figure comes from

    At the IWIP groundbreaking on Thursday 8 October, Investment and Downstreaming Minister and Danantara CEO Rosan Roeslani said installed and under-construction power capacity at IWIP exceeds 7.1 GW, while the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi has about 8.8 GW. He put the combined total at roughly 15.9 GW and compared it with Singapore’s total electricity use of 13.1 GW, according to Antara and Kontan.

    Antara’s report of the event put the 11 projects at US$10.2 billion. They include nickel-based battery materials, battery separators and electrolytes, aluminium smelting, electric mining trucks and solar glass. Antara did not describe the parks’ power mix. Kontan’s reporting says the capacity is dominated by captive coal-fired plants (PLTU captive), which operate outside the state utility PLN’s grid.

    Why smelters build their own coal plants

    Muhammad Kholid Syeirazi, a member of the National Energy Council (DEN), told Kontan that investors choose captive coal because it is seen as cheap, reliable and can be built anywhere, including areas PLN’s grid does not reach. Smelters need gigawatt-scale power that runs around the clock, and he said PLN’s systems in some industrial regions cannot yet supply that.

    “If industrial expansion continues to be powered by captive coal plants, the Net Zero Emission 2060 target could be missed.”
    — Muhammad Kholid Syeirazi, DEN, to Kontan (translated from Indonesian)

    He called for all new captive capacity to be written into the national energy and electricity plans (RUEN, RUKN and PLN’s RUPTL) so it can be tracked against transition goals. He also noted that global buyers increasingly look at the carbon footprint of nickel, steel, aluminium and EV battery materials, and that high-emission products could face trade barriers and higher compliance costs.

    Saleh Abdurrahman of the Indonesian Renewable Energy Society (METI) told Kontan that large industrial users usually build their own plants when PLN cannot guarantee the capacity and reliability they need. He said the government’s planned 100 GW solar programme would make net-zero commitments more credible if it is delivered, but that it still needs clear buyers for the power.

    Stranded-asset and revenue concerns

    Yusuf Rendy Manilet, a researcher at the Center of Reform on Economics (CORE), told Kontan that state revenue from the parks does not rise in step with export values, because of fiscal incentives, imported capital goods and profits sent abroad. He said the net benefit shrinks further once health, pollution and carbon costs are counted. He also pointed out that current rules still exempt captive coal plants linked to national strategic projects.

    He warned that high-carbon nickel could lose access to premium markets or face price penalties. He also said the coal plants being built now “have operating lives of decades, so they risk becoming stranded assets” (translated from Indonesian). His suggestions included requiring new smelters to use renewable or hybrid power, and opening “power wheeling” so parks can buy green electricity through PLN’s network.

    What it means for buyers

    For Indonesian EV buyers, nothing changes at the showroom today. Only a handful of EVs on sale locally use nickel-based batteries, as Suara noted earlier this year, so the parks’ power mix has little direct bearing on what most local buyers drive. The issue matters more for the bigger picture: whether Indonesia’s nickel-to-battery strategy, outlined in our battery industry guide, can produce materials that carmakers and overseas regulators regard as low-carbon. That will shape how much battery investment and value-added work stays in Indonesia, alongside the 60% local-content rule due from 2027.

    Update, 14 October 2026: the government is now weighing a moratorium on new smelters that make semi-finished nickel. Read more: Indonesia weighs halt to new semi-finished nickel smelters amid glut.

    Sources: Kontan – DEN on captive power (11 Oct 2026); Kontan – METI on industrial power demand (11 Oct 2026); Kontan – CORE on nickel exports (11 Oct 2026); Antara – 11 industrial projects worth US$10.2 billion (8 Oct 2026)

  • Converting a petrol motorbike to electric in Indonesia: costs and rules

    Converting a petrol motorbike to electric in Indonesia: costs and rules

    Top image: Photo: Tri Mega Widyawan, CC BY-SA 4.0, via Wikimedia Commons

    Indonesia’s energy minister has talked about speeding up the conversion of as many as 120 million petrol motorbikes to electric power, CNN Indonesia reported. One route is to buy a new electric motorbike. The other is to keep the bike you already own and have a workshop swap its engine for an electric motor and battery pack. This guide explains how conversion works in Indonesia, what the rules require, what it typically costs, and where the government’s conversion grant stands in late 2026.

    What conversion involves

    In a conversion, a workshop removes the petrol engine and its related parts, such as the fuel tank and exhaust, and fits an electric motor (typically a brushless BLDC unit), a lithium battery pack, a controller and new wiring for the lights and instruments. Consumer guides say automatic scooters are the most common candidates, because the battery can sit in the space under the seat. A 2026 guide from Mobil123 describes typical kits with a motor of about 2–3 kW and a 60V or 72V battery, giving roughly 50–70 km per charge. Those are the publication’s estimates rather than official figures, and real range depends on battery size and riding style.

    The legal rules: certified workshops and a new type test

    Conversion is legal, but you cannot do it yourself and ride on public roads. The basis is Transport Ministry regulation PM 65 of 2020 on converting combustion-engine motorbikes into battery-electric ones. When the rule came in, a Transport Ministry official told detikOto that only workshops holding a ministry permit may carry out conversions, and that each converted bike must be tested again to receive a new type-test certificate (SUT).

    The regulation also sets out what a conversion workshop needs. As summarised by Tirto, this includes at least one installation technician and one maintenance technician, special tools for fitting the electric drive, and equipment to test insulation resistance and protection against electric shock. In practice, this means that a cheap kit fitted by a general mechanic will leave you with a bike that does not match its registration papers.

    After conversion and testing, the vehicle’s registration documents (STNK and BPKB) have to be updated at Samsat to reflect the new electric motor. Mobil123 also notes that the bike must have complete, valid papers and no unpaid vehicle tax before work starts.

    How much it costs

    Estimates vary, and none is an official price list:

    • The energy ministry (ESDM) has put the typical cost of a conversion at around Rp15 million, according to Bisnis.com. The think tank INDEF puts it at Rp12–16 million.
    • The original 2023 programme rules capped the workshop fee at Rp17 million, CNN Indonesia reported.
    • Mobil123’s 2026 breakdown is higher, at Rp17.5–22.5 million before any grant. It covers the motor and controller (Rp8–10 million), the battery (Rp7–9 million), labour (Rp1.5–2 million) and testing and paperwork (Rp1–1.5 million).

    Energy minister Bahlil Lahadalia has suggested that cheaper technology could bring the cost down to about Rp5–6 million per bike, CNN Indonesia reported in July. That is a target, not a price you can get today.

    The government grant: lapsed for now, relaunch proposed for 2027

    The ministry’s conversion programme began with pilots in 2022. Under ESDM regulation 13 of 2023, the grant rose from Rp7 million to Rp10 million per bike. Eligible bikes had petrol engines of 100–150cc, according to CNN Indonesia, while Mobil123 gives the range as 110–150cc. Take-up fell far short of the targets. The rules aimed for up to 50,000 conversions in 2023 and 150,000 in 2024. Bisnis.com reports that only hundreds were done in 2023 and about 1,500 in 2024. In February 2026, Eniya Listiani Dewi, director general of renewable energy at ESDM, put the running total at 2,250 bikes.

    Under the previous scheme, the Rp10 million grant was topped up with company CSR funds so that owners paid nothing. Eniya described the arrangement to Bisnis.com:

    “At the time I mobilised CSR funds to cover the Rp5 million, so it was free for the public.” (translated from Indonesian)

    The regulation behind the grant ran only until 2024, and in July officials said its replacement was still in draft, with the ministry still studying whether to keep the old design. On 31 August, Bahlil told parliament’s Commission XII that the ministry was proposing Rp635.24 billion to convert 63,000 motorbikes in the 2027 budget. By our calculation, that works out to just over Rp10 million per bike. The figure was a proposal and could change during budget talks.

    Some consumer articles published this year still describe a Rp10 million grant as available now. Before you commit, check the ministry’s official conversion portal or ask a certified workshop whether any quota is actually open.

    Why take-up has been low

    Analysts quoted by Bisnis.com point to several problems:

    • Many older bikes lack complete papers, so they cannot qualify for the grant.
    • Owners worry about resale value and the safety of converted bikes.
    • Even after a grant, the cost is high relative to what an older scooter is worth.
    • Certified workshops are few and mostly in Greater Jakarta. CNN Indonesia counted 25 registered on the programme’s website.

    INDEF’s Andry Satrio Nugroho has argued for a scrap-and-replace scheme instead, in which old bikes are retired in exchange for new locally made electric ones. He has also suggested that ride-hailing and delivery fleets should come first.

    Convert or buy new? What it means for buyers

    For most private riders, conversion only makes sense when a grant is available. Without one, a conversion costing Rp15 million or more has to be weighed against the price of a new electric scooter, which comes with a factory warranty and dealer support. Our electric motorbike buyer’s guide covers the models and price bands. The purchase incentive for new e-motorbikes is also on hold, though, and buyers have been waiting for a decision for months.

    If you do go ahead:

    • Use only a workshop with Transport Ministry certification for conversions.
    • Make sure the price includes the type test and the update to your STNK and BPKB.
    • Ask what the battery chemistry and battery management system are, and what the warranty covers. Mobil123 suggests looking for at least three years on the battery.
    • Plan your charging. A converted bike charges like any e-motorbike, and our charging guide explains home charging and battery swapping.

    If the 2027 budget line survives, a new round of grants could make conversion cheap or free again for eligible owners. Until the rules are published, it is safest to treat any offer of a subsidised conversion with caution.

    FAQ

    Can I convert my own motorbike at home?

    No, not if you want to ride it legally on the road. Under PM 65/2020, a permitted workshop must do the conversion, and the bike must pass a new type test.

    Is there a conversion subsidy right now?

    The grant regulation ran only until 2024. As of July, officials said the replacement rules were still in draft, and the energy ministry has proposed funding for 63,000 conversions in 2027. Check the ministry’s official portal for current quotas.

    Which bikes can be converted?

    Under the past grant scheme, petrol bikes in roughly the 100–150cc range qualified, and sources differ on the exact lower limit. Automatic scooters are the most common choice. The bike also needs valid registration papers.

    Update, 25 October 2026: Bali’s governor has asked South Korea for partners to convert petrol vehicles to electric at no cost to owners; no scheme exists yet. Read our report.

    Sources: Bisnis.com; CNN Indonesia (Feb 2026); CNN Indonesia (Jul 2026); Periskop; Mobil123; detikOto; Tirto.

  • Revised traffic law to classify vehicles by power source and cover self-driving

    Revised traffic law to classify vehicles by power source and cover self-driving

    Top image: Photo: Andylala Waluyo (VOA), Public domain, via Wikimedia Commons

    Electric vehicles and self-driving technology are set to get an explicit place in Indonesian road law for the first time. At a working meeting with the House of Representatives’ Commission V on 30 September, Transport Minister Dudy Purwagandhi said the government accepts lawmakers’ proposals to classify motor vehicles by their power source and to cover autonomous driving systems in a revised version of Law No. 22 of 2009 on Road Traffic and Transport (UU LLAJ), CNBC Indonesia and detikOto reported.

    The current law dates from 2009, before battery-electric cars and motorbikes were on sale in meaningful numbers in Indonesia. Since then, EV rules have mostly been set through presidential and ministerial regulations rather than primary legislation.

    What the draft would change for EVs

    According to detikOto, the proposals sit in Chapter VII of the bill, which deals with vehicle types. The revision would set out:

    • Vehicle categories by use: private vehicles, public transport and shared or ride-hailing services, each with its own requirements.
    • Classification by power source: vehicles grouped by fuel or energy type, which brings battery-electric vehicles into the law’s own definitions.
    • Autonomous technology: rules for steering systems with partial or full automated control.

    Autonomous vehicles will not become a separate vehicle category. Instead, detikOto reported, self-driving is treated as a development of steering technology with automatic control systems. Kumparan added that the bill also anticipates electronic traffic enforcement.

    A much wider rewrite

    The EV provisions are one part of a broad overhaul. Viva reported that the government’s list of issues (DIM) proposes revising 89 articles, adding 56 new ones and deleting five. The headline changes concern ride-hailing (ojol) platforms, including tariffs and the obligations of app companies, and tougher criminal penalties for over-dimension, overloaded (ODOL) trucks that would extend liability from drivers to vehicle owners, companies and cargo owners.

    The minister wants the work done quickly. “Our hope is this can be completed in 2026, so it can be implemented in 2027,” he said, as quoted by Viva (translated from Indonesian). CNBC Indonesia noted that the bill is on the 2026 priority legislation list (Prolegnas). No detailed EV wording has been published yet, and the bill still has to pass through committee deliberations before a plenary vote.

    Why it matters

    Much of Indonesia’s EV policy so far has been about money, such as the tax incentives and the local-content (TKDN) rules. Day-to-day questions about how EVs are treated on the road and in transport services have been handled piecemeal. This year, for example, some owners have faced refusals on ferries while operators set their own charging and safety rules. Bringing power source into the main traffic law could give regulators a clearer base for EV-specific technical, safety and transport rules later on.

    The ride-hailing provisions also matter for electrification, because app-based fleets are among the fastest adopters of electric cars and motorbikes in Jakarta, including the VinFast-based Green SM services.

    What it means for buyers

    Nothing changes yet for people who own or are buying an electric car or motorbike. Registration, taxes and incentives stay under the existing rules until the revised law is passed and its implementing regulations are issued, which on the government’s timetable would be 2027 at the earliest. The practical details, such as how EVs will be defined, what technical requirements follow, and how driver-assistance features are treated, will depend on the final text and the regulations that come after it. We will report on them as they emerge.

    Sources: CNBC Indonesia; detikOto; Viva; Kumparan

  • New industry minister inherits stalled e-motorbike incentive as sales sink

    New industry minister inherits stalled e-motorbike incentive as sales sink

    Top image: Muhammad Sarmuji. Photo: KPU (General Election Commission), Public domain, via Wikimedia Commons

    Indonesia has a new Industry Minister, and one of the first files on his desk is an electric motorbike incentive that has been close to ready for months. Muhammad Sarmuji, until now secretary-general of the Golkar party, was sworn in by President Prabowo Subianto at the State Palace on 1 October, replacing Agus Gumiwang Kartasasmita, Antara reported. It was Prabowo’s seventh cabinet reshuffle since he took office in October 2024.

    The change comes at an awkward moment for the EV industry. As we reported on 27 September, Agus had said the Industry Ministry’s technical work on the e-motorbike purchase incentive was finished and that the decision rested with the Ministry of Finance. A week later, the money has still not been released.

    A promise of continuity

    At his handover ceremony in Jakarta on 2 October, Sarmuji signalled that he would build on his predecessor’s programmes rather than tear them up.

    “We must carry forward what has been achieved and further strengthen the foundations that have been laid.” – Muhammad Sarmuji, Industry Minister, quoted by Antara

    He did not mention electric vehicles in those remarks. But the ministry he now runs sets the local-content (TKDN) thresholds that decide which EVs qualify for tax breaks, and it designed the motorbike incentive. Kumparan listed sustaining EV incentives, strengthening local component supply chains, emission standards and reviving weak car and motorbike demand among his immediate challenges. A member of the House commission that oversees industry, Gandung Pardiman, told Republika the new minister should look beyond finished vehicles and also strengthen the component industry, echoing complaints from parts makers last month.

    Incentive still waiting for a Finance Ministry rule

    The incentive itself has shrunk while it waited. The original plan was Rp5 million per motorbike; the figure now under discussion is Rp3 million, with a proposed budget of Rp3 trillion covering up to one million locally made units, according to detikFinance.

    Industry Ministry spokesperson Febri Hendri Antoni Arief told OtoDream on 3 October that the scheme was still waiting for a Finance Minister regulation (PMK), and that the Finance Ministry would set the amount based on the state’s fiscal capacity. The ministry is not announcing details until the rule is signed, he said, to avoid raising false expectations.

    On 4 October, Coordinating Minister for Economic Affairs Airlangga Hartarto said the incentive would still take effect this year, telling detikOto that the matter sat with the Industry and Finance ministries and that his office would monitor it. He added that this year’s budget allocation (DIPA) is held by the Energy and Mineral Resources Ministry, a further sign of how many hands the scheme passes through. He gave no start date.

    Dealers say the market is frozen

    Moeldoko, chairman of the electric vehicle industry association Periklindo, said the repeated delays were hurting sellers because buyers keep postponing purchases until they know whether a discount is coming.

    “All our dealers and manufacturers are stuck now.” – Moeldoko, Periklindo, to detikOto (translated from Indonesian)

    The sales figures support him. According to detikFinance, electric motorcycle sales from January to August 2026 totalled about 18,900 units, compared with around 77,000 for the whole of 2024 and roughly 70,000 in 2025. By our own calculation, that is an average of about 2,400 a month this year against about 5,800 a month last year. Budi Setiyadi, chair of the electric motorcycle association Aismoli, described the fall as very steep and said many people were waiting to see when the subsidy would arrive. We first reported on the slump in September.

    What it means for buyers

    • No incentive is available today. Until a Finance Ministry regulation is published, dealers cannot apply a government discount, whatever the headlines say.
    • Rp3 million, not Rp5 million, is the likely figure if the scheme goes ahead, and it is expected to cover locally produced models only.
    • Waiting has a cost too. With less than three months of 2026 left and no start date, buyers who need a bike now may find that dealer promotions are worth as much as the uncertain subsidy. Our electric motorbike buyer’s guide and 2026 EV tax and incentive guide explain current prices and rules, and our EV directory lists the brands on sale.

    Whether Sarmuji can push the regulation through faster than his predecessor will be the first test of his promise of continuity. IndoEVs will report when the rule is signed.

    Update, 9 October 2026: Coordinating Economic Minister Airlangga Hartarto has since said the incentive will take effect this year. See Motorbike sales jump 15% in September as e-motorbikes wait on incentive.

    Sources: Antara (1 Oct); Antara (2 Oct); Kumparan; Republika; OtoDream; detikOto; detikFinance

  • Ministry floats dedicated EV ships as ferry operators set charging rules

    Ministry floats dedicated EV ships as ferry operators set charging rules

    Top image: Photo: CEphoto, Uwe Aranas, CC BY-SA 3.0, via Wikimedia Commons

    Indonesia’s Ministry of Transportation (Kemenhub) has opened the door to ships built or set aside specifically for carrying electric vehicles, a week after the EV industry complained that owners and manufacturers were being turned away from ferries. At the same time, the national ferry operators’ association has spelled out the conditions its members now apply when an EV rolls up to the ramp.

    The comments were made on Friday 2 October at a press workshop in Bandung, West Java, and reported by CNBC Indonesia and CNN Indonesia. They follow the dispute we covered last week, when EV owners reported ferry refusals and the ministry restated its battery safety rules.

    Ministry: EVs are allowed, and dedicated ships may follow

    Lollan Andi Sutomo Panjaitan, acting director general of sea transportation at Kemenhub, repeated that electric vehicles may travel by sea as long as the safety conditions are met. On board, he said, they will be placed in designated areas that are watched more closely than the rest of the vehicle deck.

    Looking further ahead, he floated the idea of separate tonnage for EVs. “Ideally, in time there could also be dedicated ships specifically for electric cars,” he said, according to CNBC Indonesia (translated from Indonesian). No timetable, budget or operator was attached to the idea, so for now it is an option rather than a plan.

    What ferry operators now ask of EV owners

    Khoiri Soetomo, chairman of Gapasdap, the association of river, lake and ferry operators, set out the procedures its members are using, as reported by both outlets:

    • Arrive early. EV drivers are asked to check in ahead of other traffic so the crew can choose where to park the vehicle.
    • Ventilated placement. EVs go in areas with good air circulation and blowers, where they can be monitored during the crossing.
    • Do not board fully charged. Soetomo said batteries should not be at 100%.
    • A last-resort fire plan. Vehicles are positioned so that, if a battery fire cannot be brought under control, the car can be pushed into the sea.

    CNBC Indonesia also reported that Gapasdap and the state classification society, Biro Klasifikasi Indonesia (BKI), are drawing up certification standards for vessels that carry EVs, reflecting the fact that lithium-ion battery fires behave differently from petrol fires and need different equipment.

    Which battery limit applies?

    There is a gap between the operators’ wording and the ministry’s written rule. The governing document is still Kemenhub circular SE-DJPL 12 of 2024, issued on 4 April 2024, which CNN Indonesia said covers hybrids, plug-in hybrids, battery EVs and hydrogen fuel-cell vehicles. In September, CNBC Indonesia reported that the ministry’s guidance caps the charge at 50% and requires EVs to be parked on an open deck. “Not 100%”, as quoted from Gapasdap this week, is a looser description. Until the two are aligned, owners are safest working to the stricter 50% figure.

    Why the industry pushed

    The issue was escalated by Moeldoko, chairman of the EV industry association Periklindo, who told parliament’s Commission VII on 21 September that refusals were holding back distribution of electric motorbikes, cars and trucks between islands, CNBC Indonesia reported. Large brands such as BYD can operate their own car carriers, he noted, but smaller assemblers and dealers depend on scheduled ferries and cargo services. Separate EV vessels would ease that bottleneck, but would also add a new layer of cost and scheduling that the sector has not yet had to price in.

    What it means for buyers

    If you plan to take an electric car or motorbike between Java, Sumatra, Bali or other islands, expect extra checks rather than a ban. Charge to no more than 50% before you leave, allow time to arrive early, and be ready to be directed to an open or specially ventilated part of the deck. Plan a charging stop near the arrival port: our guide to SPKLU and home charging explains how to find one. Buyers outside Java may also see longer delivery times from smaller brands while shipping arrangements settle down, so check with the dealer before paying a deposit. You can compare which brands sell in Indonesia in our EV directory.

    Related: Revised traffic law to classify vehicles by power source and cover self-driving

    Sources: CNBC Indonesia, 2 Oct 2026; CNN Indonesia, 3 Oct 2026; CNBC Indonesia, 11 Sept 2026; CNBC Indonesia, 21 Sept 2026.

  • EV taxes and incentives in Indonesia in 2026: what buyers now pay

    EV taxes and incentives in Indonesia in 2026: what buyers now pay

    Top image: Photo: Ilham jayakesuma, CC BY-SA 4.0, via Wikimedia Commons

    For most of 2024 and 2025, buying an electric car in Indonesia came with a stack of tax breaks: duty-free imports for brands that promised to build locally, a government-paid slice of VAT, and zero regional vehicle tax. In 2026 that stack has been largely dismantled, a replacement has been promised repeatedly but not yet delivered, and the rules now differ depending on where the car is made and where you live. This guide sets out what has changed, what still applies and what is still pending, based on reporting up to the end of September 2026.

    What ended on 31 December 2025

    The CBU import scheme

    Since 2024, brands that committed to building EVs in Indonesia could import fully built (CBU) electric cars without import duty or luxury tax (PPnBM). CNN Indonesia reported that this cut import duty from 50% to 0% and PPnBM from 15% to 0%, and that the scheme, under Industry Ministry Regulation 6/2023, was not extended beyond 2025.

    The catch for manufacturers is that the bill is not over. According to Kumparan, companies that used the scheme must build as many cars locally as they imported, by the end of 2027, backed by bank guarantees. Kumparan listed nine brands moving from imports to local production (Geely, BYD, VinFast, GWM, AION, Volkswagen, Xpeng, Citroën and Maxus), alongside six already assembling locally (Hyundai, Wuling, Chery, Polytron, Neta and MG). Brands that stayed out, such as BMW, Mercedes-Benz and Volvo, now face import duty of up to 50%, 12% VAT and 15% luxury tax on imported EVs, the outlet reported.

    The 10% VAT discount

    The other big break was PPN DTP, a portion of VAT paid by the government. Under Finance Ministry Regulation (PMK) 12/2025, the state covered 10 percentage points of VAT on four-wheeled battery EVs with at least 40% local content, from 4 February to 31 December 2025, Tempo reported. The same rule gave hybrids a 3% luxury-tax discount. CNN Indonesia confirmed in January that no new rule had been issued to carry the VAT break into 2026.

    The replacement incentive: promised, redesigned, delayed

    A new incentive has been under discussion all year, and its shape has changed several times:

    • May: Finance Minister Purbaya Yudhi Sadewa said the government would cover between 40% and 100% of VAT on electric cars depending on battery type, plus a Rp5 million subsidy per electric motorbike, for 100,000 of each, starting in June, Antara reported.
    • Late May: Purbaya postponed the scheme by a month because the calculations were not finished, CNBC Indonesia reported.
    • June: Coordinating Economic Minister Airlangga Hartarto confirmed a further delay. DDTC News reported the proposal as 100% VAT cover for cars with nickel-based (NMC) batteries and 40% for those using alternatives such as lithium iron phosphate (LFP).
    • August: At GIIAS, Purbaya said President Prabowo Subianto would announce the incentives within weeks, with the quota raised to 500,000 cars and 500,000 motorbikes, CNN Indonesia reported.
    • September: The motorbike element had been reshaped into Rp3 million per locally made e-motorbike, with a Rp3 trillion budget and a target of up to one million units, detikOto reported. On 24 September, ministers said they were still waiting for the Finance Ministry regulation, according to Telset.

    We have not found any report that the car VAT incentive has been put into force. Until a regulation is published, buyers should treat dealer talk of a coming “government discount” as unconfirmed. Our latest report on the e-motorbike subsidy has the most recent position on the two-wheeler scheme.

    “Yes, it’s delayed again, while we examine it first.” — Airlangga Hartarto, Coordinating Minister for Economic Affairs, to DDTC News, June 2026 (translated from Indonesian)

    Regional vehicle tax: no longer automatically zero

    Annual vehicle tax (PKB) and the transfer fee paid on a new registration (BBNKB) are regional taxes. EVs used to be exempt nationwide. Home Affairs Ministry Regulation 11/2026, effective from April, ended the automatic exemption and handed the decision to regional governments, which may grant a full exemption or a reduction, Antara and Liputan6 reported.

    “It still really needs incentives. But of course, we have to consider our fiscal situation.” — Deputy Industry Minister Faisol Riza, to Antara

    In practice, many EV owners are still paying nothing. Jakarta, the largest EV market, has kept PKB and BBNKB at zero and still exempts battery EVs from the odd-even traffic restriction, FIN reported in May. A Home Affairs circular dated 22 April (No. 900.1.13.1/3764/SJ) is cited as the basis; local reports differ on whether it simply permits governors to keep the exemption or instructs them to. Either way, the position can vary by province, so check with your local Samsat office or the provincial revenue agency (Bapenda) before you buy.

    Local content (TKDN): the rule behind every incentive

    Almost every EV incentive in Indonesia is tied to local content, known as TKDN. Battery-electric cars need 40% local content through 2026, rising to 60% from 2027 and 80% from 2030, as the Industry Ministry restated this week. Parts makers have warned that the 2027 step will be hard to meet without local battery cells, as we reported in our GIAMM story. If a future VAT incentive also depends on battery chemistry, as proposed, the price gap between models could widen depending on where and how they are built.

    Where the market stands

    The loss of incentives has not stopped growth. Electric cars reached 101,171 sales in January–August 2026, or 16.88% of the 599,491-unit market, Suara reported. The electric motorbike market has been weaker, which manufacturers partly blame on buyers waiting for the subsidy. See our report on the e-motorcycle sales slump.

    What it means for buyers

    • Locally assembled EVs are now the value end of the market. With the CBU scheme gone, brands that build locally have the clearest tax advantage. Brands still importing have to absorb the duty or pass it on in their prices.
    • Do not count on a VAT discount yet. If one arrives, it may favour cars with nickel-based batteries over LFP models. Ask the dealer whether a price-protection or refund clause applies if an incentive is introduced shortly after you buy.
    • Check your province. Whether you pay PKB and BBNKB now depends on where the car is registered. Jakarta remains at zero, but other regions can set their own rates.
    • Motorbike buyers have the most to gain from waiting. A Rp3 million subsidy is a large share of the price of an entry-level e-scooter, but there is still no firm start date.

    For models and current prices, see our electric car buying guide, our electric motorbike buyer’s guide and the IndoEVs directory of brands on sale in Indonesia. We will update this guide when the new incentive regulations are published.

    Related: EV running costs in Indonesia: home charging, SPKLU, tax and petrol compared

    Latest: the planned VAT relief may favour nickel-battery cars over LFP models, a split the industry body Periklindo is challenging. Read: Periklindo pushes back on bigger EV incentives for nickel-battery cars.

    Sources: CNN Indonesia (6 Jan 2026); Kumparan; Tempo (19 Feb 2025); Antara (7 May 2026); CNBC Indonesia (26 May 2026); DDTC News (23 Jun 2026); CNN Indonesia (4 Aug 2026); detikOto (1 Sep 2026); Telset (24 Sep 2026); Antara (22 Apr 2026); Liputan6; FIN (5 May 2026); Suara (1 Oct 2026).

  • Ministry reaffirms 60% EV local-content rule from 2027 as EV share hits 16%

    Ministry reaffirms 60% EV local-content rule from 2027 as EV share hits 16%

    Top image: Photo: Andra Febrian, CC BY 4.0, via Wikimedia Commons

    Indonesia’s Ministry of Industry has restated that locally built battery-electric vehicles will need to reach 60% local content (TKDN) from 2027, rising to 80% from 2030. Officials also said electric cars now make up 16% of the domestic market, and that EVs could overtake combustion-engine vehicles within the decade.

    The comments came at a forum on Wednesday 30 September titled “Powering Indonesia Future: Green Cars, Blue Skies”, CNN Indonesia reported. They come two days after the parts makers’ association GIAMM warned that the current rules leave little room for local suppliers.

    The timetable

    Patia J. Monangdo, head of the ministry’s working team for battery-based electric vehicles, set out the staged requirements. According to CNN Indonesia, the minimum local-content levels for electric cars are:

    • 2019–2021: 35%
    • 2022–2026: 40%
    • 2027–2029: 60%
    • 2030 onwards: 80%

    Similar stages apply to electric two- and three-wheelers, the report said.

    “The roadmap for 2026 is currently 40 per cent; from 2027 to 2029 it will be 60 per cent.” – Patia J. Monangdo, Ministry of Industry, to CNN Indonesia (translated from Indonesian)

    None of this is a new rule. The 60% level was first due in 2024 under Presidential Regulation 55/2019. It was pushed back to 2027 by Presidential Regulation 79/2023, signed in December 2023. That revision also exempted vehicles converted to electric power by certified workshops. It also said that companies which imported cars under the incentive scheme must build locally to the TKDN schedule, or repay an amount equivalent to the incentives they received.

    What the forum did show is that the government is not planning another delay. With 2027 only three months away, car makers have little time left to close the gap. According to CNN Indonesia, the average TKDN score for EVs in Indonesia is currently 45–47%. The highest is 80%, and more than 100 EV products have been certified. In July, Patia told Viva that one model had already reached 80%.

    EV share climbs to 16%

    Patia also gave new figures on how fast the market is growing. He said electric vehicles’ share of sales had been only around 2–3% previously, reached about 12% in 2025 and stands at 16% so far this year, Portal Media and CNN Indonesia reported. The reports did not say whether the figure covers only battery-electric cars or also includes hybrids. It is also not clear which sales measure it is based on, so it may not match Gaikindo’s monthly data exactly.

    He said Indonesia can produce almost 1.5 million motor vehicles a year. He also argued that the country’s nickel reserves should bring investment across the whole battery chain, from nickel processing and cathode and anode production to cell making and recycling. We cover this in our guide to Indonesia’s battery industry. The ministry says it will help component makers with certification, technical training and competency standards so that they can join EV supply chains.

    Overtaking petrol cars “by 2029–2031”

    Deputy Industry Minister Faisol Riza went further. CNN Indonesia reported that under the ministry’s fast-growth scenario, EVs could outnumber combustion-engine (ICE) vehicles in 2029–2031. Under a moderate scenario, battery-electric vehicles would overtake ICE in 2032–2034. He said the projection does not yet take hybrids and plug-in hybrids into account. The report’s headline refers to the vehicle “population”, but it does not explain whether the ministry means annual sales or the total number of vehicles on the road. The difference is large. With EVs at 16% of sales today, it would take much longer for them to outnumber ICE vehicles on the road than for them to outsell them.

    What it means for buyers

    • Local content is the price lever to watch. Indonesia’s EV incentives have been tied to TKDN thresholds, and the e-motorbike subsidy now under discussion also requires at least 40% local content, OtoDream reports. If car makers cannot reach 60% by 2027, and incentives stay linked to the minimum level, prices of some models could come under pressure unless makers use more local parts or change their line-ups.
    • Imported models are most exposed. Brands that entered with imported (CBU) cars under the incentive scheme have committed to local production. Buyers of those models may see changes in which variants are offered and how much they cost as local assembly begins.
    • Nickel-based batteries could become more common. The ministry’s focus on nickel suggests the government wants more nickel-based batteries in future locally built EVs.

    For current prices and models, see our electric car buying guide and the IndoEVs directory.

    Update, 13 October 2026: the ministry now says brands without an Indonesian assembly plant could still reach 60% by using locally made batteries. Read our follow-up.

    Sources: CNN Indonesia – TKDN rules; CNN Indonesia – TKDN roadmap; CNN Indonesia – 16% market share; CNN Indonesia – EV vs ICE projection; Portal Media; Viva (July 2026); OtoDream – e-motorbike incentive.

  • Parts makers say EV local-content rules leave little room for suppliers

    Parts makers say EV local-content rules leave little room for suppliers

    Top image: Photo: Andra Febrian, CC BY-SA 4.0, via Wikimedia Commons

    Indonesia’s rule that locally built electric cars must reach 40% local content (TKDN) this year is doing less for domestic parts makers than the headline figure suggests, according to the country’s automotive component industry association.

    Rachmat Basuki, secretary general of GIAMM (Gabungan Industri Alat Mobil dan Motor), told CNBC Indonesia on Monday 28 September that only a narrow range of EV parts is currently sourced from Indonesian suppliers. He listed tyres, wheel rims, safety glass, wiring harnesses and some interior parts as the main examples.

    How the 40% is reached

    The explanation lies in how the TKDN score for electric cars is weighted. As Rachmat described it to CNBC Indonesia, the calculation gives:

    • 30% for carrying out vehicle assembly in Indonesia;
    • 40% for localising the battery, down to cell level;
    • 10% for localising other main or supporting components.

    That means a manufacturer that assembles its cars locally already has three-quarters of the 2026 target in hand. In Rachmat’s words, the remaining gap is closed by localising a handful of components, “although not yet on a large scale” (translated from Indonesian).

    For component makers, the practical effect is that a carmaker can clear the current bar without buying much from them. Rachmat said suppliers want a bigger role and noted that the government has twice organised business-matching sessions between parts makers and EV producers, on top of the contacts carmakers make on their own.

    The bar rises from 2027

    The pressure on the supply chain is set to grow. The Industry Ministry’s local-content path for EVs rises from 40% in 2026 to 60% for 2027–2029 and 80% from 2030, Antara reported earlier this month. Under the weighting described by GIAMM, those higher thresholds are hard to meet through assembly alone; they point towards local battery cells and a far deeper parts base. (This is our reading of the figures, not a statement by GIAMM.)

    The government is also looking at tying future incentives more directly to local content. Speaking at the opening of BYD’s Subang plant on 3 September, Industry Minister Agus Gumiwang Kartasasmita said his ministry had been asked to study incentive schemes linked to TKDN and would work with the Finance Ministry on the design, according to Antara. He said the higher a product’s TKDN score, the more attention it should get from government. Antara reported on 26 September that this work on TKDN-based EV incentives is continuing.

    We covered the BYD factory opening and its local-content plans at the time, and the parallel debate on the motorbike side, where ALVA told lawmakers local suppliers are the bottleneck as TKDN requirements climb.

    Why batteries matter most

    With battery localisation carrying the single largest weight in the formula, cell production is the lever that will decide whether carmakers can hit 60% and later 80%. That links the car market directly to Indonesia’s nickel and battery investment push, including the CATL–IBC plant in Karawang. Our guide to Indonesia’s EV and battery industry explains how those pieces fit together.

    What it means for buyers

    The 40% rule for 2026 is already in place, so nothing changes at the showroom as a result of these comments. The bigger question is 2027. If incentives are rewritten to reward higher TKDN scores, brands that have invested in local cells and parts could gain a price advantage, while those relying mainly on local assembly may have to absorb costs or raise prices. Buyers comparing models over the next year may find it worth asking dealers whether a car is locally assembled and what its TKDN rating is. Our electric car buying guide covers the current line-up and prices.

    Update, 30 September: The Ministry of Industry has confirmed that the requirement will rise to 60% local content from 2027 and 80% from 2030. Read our follow-up.

    Sources: CNBC Indonesia, 28 Sep 2026; Antara, 3 Sep 2026; Antara, 26 Sep 2026