The Indonesian government has announced a reduction in the value-added tax (VAT) on battery electric vehicles from 11% to 1% in order to attract more investment and promote the domestic electric vehicle industry.
An official statement released by the Indonesian government stated that this incentive measure will take effect this month and is expected to continue until the end of the year. The policy also applies to certain electric buses. Last month, Indonesia announced a funding of 70 trillion Indonesian rupiahs (approximately 320 million Chinese yuan) for electric motorcycle sales subsidies, which will continue until 2024.
Public data shows that Indonesia is the world's largest producer of the metal nickel, a crucial material for electric vehicle batteries. To leverage its abundant nickel resources, Indonesia has been actively promoting investment in domestic battery and electric vehicle production. According to reports, Hyundai Motor Group from South Korea and LG Energy Solutions have begun constructing electric vehicle and battery factories in Indonesia. The Indonesian government is also working to attract investment and production partnerships with Chinese electric vehicle manufacturer BYD Group and American electric vehicle manufacturer Tesla.
