According to Reuters, Indonesia has announced new incentive measures aimed at encouraging the sale of locally produced and imported electric vehicles, thereby promoting the adoption of eco-friendly cars and attracting investment in the domestic electric vehicle industry.
Following last December's announcement of tax incentives for imported electric vehicles, Indonesia has now introduced more detailed incentive measures.
Under regulations announced later on February 20, Indonesia will eliminate luxury taxes on electric vehicles in the 2024 fiscal year and remove import duties by the end of 2025. This year, Indonesia will also reduce the value-added tax for electric vehicle buyers from 11% to 1%, extending the tax reduction policy that was due to expire at the end of 2023.
The Indonesian government stated that these incentive measures aim to stimulate domestic demand for electric vehicles while attracting investment from automobile manufacturers.
Rachmat Kaimuddin, Indonesia's Deputy Coordinating Minister responsible for the development of the electric vehicle industry, stated that since the Indonesian government announced its intention to introduce incentive measures, many electric vehicle manufacturers have disclosed plans to introduce electric vehicles to Indonesia.
BYD unveiled three pure electric vehicles planned for sale in Indonesia last month.
Speaking at another press conference, Rachmat told reporters, "We hope these efforts will bring more products and make them more affordable."
The Indonesian government aims to produce 600,000 electric vehicles domestically by 2030, which would be more than 100 times the electric vehicle sales in Indonesia in the first half of 2023.
Indonesia also hopes to leverage its abundant nickel reserves to become a hub for electric vehicle production. Nickel is a crucial material for electric vehicle batteries.
