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On September 12, Indonesia\u2019s Ministry of Industry announced it will end all electric vehicle (EV) import tax incentives by December 31, 2025, and from 2026 onwards require automakers to assemble vehicles locally. This marks a major policy shift from imports to domestic manufacturing, with far-reaching implications for global automakers in Southeast Asia.<\/p>\n\n\n\n
Since late 2023, Indonesia had granted import duty exemptions, waived luxury sales tax, and reduced VAT on EVs to stimulate adoption. The incentives paid off: EV sales surged to 42,000 units in January\u2013July 2025, up 140% year-on-year, reaching nearly 10% of new car sales. Chinese brands benefited the most, with BYD commanding over 50% market share through a fully import-driven strategy, highlighted by the launch of its competitively priced M6 model.<\/p>\n\n\n\n
Yet, this rapid growth came at a cost. Domestic factory utilization fell from 73% to 55%, raising concerns about the health of Indonesia\u2019s auto industry. Local associations warned that continued reliance on imports would marginalize homegrown manufacturing, prompting the government\u2019s decisive policy shift.<\/p>\n\n\n\n
The new rules stipulate that from 2026, automakers must match their import volumes with local EV production and gradually increase local content (TKDN) from 40% to 60%. By 2027, all foreign automakers must have operational local plants. <\/p>\n\n\n\n
Officials stress that foreign automakers must \u201ctake root\u201d in Indonesia by investing in local production and supply networks. For Chinese brands, the policy brings short-term challenges but also long-term opportunities for deeper integration. Beyond reshaping Indonesia\u2019s domestic market, these changes could redefine the competitive landscape of the entire Southeast Asian EV industry.<\/p>\n","protected":false},"excerpt":{"rendered":"
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This marks a major policy shift from imports to domestic manufacturing, with far-reaching implications for global automakers […]<\/p>\n","protected":false},"author":1,"featured_media":2032,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[13],"tags":[],"class_list":["post-2033","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecology_post"],"_links":{"self":[{"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/posts\/2033","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/comments?post=2033"}],"version-history":[{"count":1,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/posts\/2033\/revisions"}],"predecessor-version":[{"id":2034,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/posts\/2033\/revisions\/2034"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/media\/2032"}],"wp:attachment":[{"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/media?parent=2033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/categories?post=2033"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.uiget.asia\/en\/wp-json\/wp\/v2\/tags?post=2033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}