Indonesia’s government continues to evaluate measures for incentives for green vehicles. The ministries of Industry, Finance, Economic Affairs, and Energy and Mineral Resources are working together to create the appropriate incentives for green vehicles.
Indonesia’s Director for maritime, transportation equipment, and defence equipment industries, Mahardi Tunggul Wicaksono said that the government is making great efforts to direct the automotive industry towards a greener path. Moreover, the government hopes that its financial incentives will encourage manufacturers and hasten the process to electrification.
The country’s Ministry of Industry is supporting the nationwide net-zero emissions (NZE) goal by establishing “key instruments.” An example of these “key instruments” is the further implementation of Indonesia’s domestic component level (TKDN) standard in vehicle production. Automakers are encouraged to meet the minimum required TKDN to avail of financial incentives.
“This is a strategic step for creating an independent and competitive automotive industry,” Wicaksono told Antara. “We believe that with the synergy of regulations, incentives, and investments, Indonesia can become a main player in the future vehicle industry.”
According to Wicaksono, the government is still evaluating potential programs for green vehicles. Recently, they implemented programs that reward automakers who are “committed” to investing in Indonesia’s auto industry. One of these programs is an exemption from import duties and luxury goods sales tax. To avail of this, vehicles must be completely built up (CBU) electric vehicles whereas completely knocked down (CKD) vehicles must be below the TKDN standard.
Earlier this year, Indonesia announced a tax incentive for hybrid automakers. The government encouraged manufacturers to register their vehicles to avail of a 3 per cent Luxury Goods (PPnBM DTP) incentive. This program is also known as the low carbon emissions vehicle (LCEV) program. Aside from EVs, Indonesia is also making way for hydrogen-fuelled vehicles. The archipelago now has two hydrogen fuelling stations, the second built by Toyota.
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