Nine Global EV Brands Commit to Local Production in Indonesia, Government Says
Jakarta. The government said several global electric vehicle (EV) manufacturers plan to start producing in Indonesia from 2026 to avoid higher import duties, as incentives for fully built-up (CBU) imports expire.
Muhammad Rachmat Kaimuddin, Deputy for Infrastructure and Transportation Coordination at Infrastructure and Regional Development Coordinating Ministry, said EV producers that do not establish local production will face higher import taxes starting next year. Companies may either build their own plants or partner with domestic assemblers, he said on Friday.
Rachmat noted that nine automotive brands have committed to producing EVs in Indonesia: Geely, BYD, Citroen, VinFast, Great Wall Motor (GWM), Volkswagen (VW), Xpeng, Maxus, and AION.
The statement aligns with remarks by Investment and Downstreaming Minister Rosan Roeslani, who said seven EV manufacturers have already built production facilities in Indonesia — VinFast, VW, BYD, Citroen, AION, Maxus, and Geely — with realized investment totaling Rp 15.4 trillion ($920 million) and combined capacity of about 281,000 units per year.
GWM operates an assembly facility in Wanaherang, Bogor, while Xpeng has an assembly plant in Purwakarta, West Java. Rachmat added that BYD is also constructing its assembly facility in Indonesia.
With local assembly in place, the nine brands will not be affected by the higher import duties as long as vehicles sold domestically are assembled locally under the completely knocked down (CKD) scheme rather than imported as CBU. Rachmat said there is therefore no reason for prices to rise.
Previously, the Industry Ministry said it would not extend incentives for battery electric vehicles (BEVs) imported as CBU starting in 2026. The government is still providing CBU import incentives through December 2025, including import-duty exemptions and relief on luxury goods tax and value-added tax, on the condition that beneficiaries realize domestic production at a 1:1 ratio to the number of vehicles imported.
From Jan. 1, 2026 through Dec. 31, 2027, EV producers will be required to manufacture vehicles in Indonesia in volumes equivalent to their CBU import quotas, in line with the government’s local content requirements.
Tags: Keywords:
as a preferred
Related Articles
Rupiah Strengthens to Rp 17,992 as Investment Data Lifts Sentiment
Rupiah gains 0.30% to Rp 17,992 per dollar as strong investment realization and easing US-Russia tensions lift market sentiment.
Indonesian-Made Batteries Could Help Imported EVs Meet 60% Content Rule
Indonesia plans to raise the minimum domestic-content requirement for electric vehicles to 60% in 2027, up from the current 40%.
Indonesia’s Trade Surplus Soars, but Import Slump Signals Risks
Indonesia’s trade surplus hit $3.55 billion in August, but falling imports raise concerns over production and investment.
Apindo Warns Labor Bill Could Stall Investment, Job Creation
Apindo warns Indonesia’s proposed labor bill could deter investment and business expansion, slowing formal job creation.
Indonesia and Thailand Look to Turn Trade into Deeper Economic Ties
Indonesia’s resources and Thailand’s know-how could unlock deeper investment, production and supply-chain links between the two countries.
Vietnam’s $80 Billion EU Trade Shows Indonesia’s Untapped Potential: Ambassador
Indonesia-EU trade remains below its potential, with the bloc's ambassador pointing to Vietnam's $80 billion trade benchmark.
Prabowo Says Indonesian Electric Car to Enter Mass Production by 2028
Prabowo targets mass production of Indonesia's national electric car by 2028 as the government launches its Molinas motorcycle initiative.
Higher BI Rate Threatens Investment, Consumer Spending: Think Tank
Core Indonesia says BI's 100-basis-point rate hike may delay investment, curb household spending, and slow bank lending growth.
South Korea’s Simone Invests $24.7 Million in Batang SEZ Factory
South Korea’s Simone will invest Rp 429 billion in a new export-oriented leather goods factory in Batang, creating 6,000 jobs.
Sudan Invites Indonesian Investment in Agriculture and Halal Industry
Sudan offers Indonesia access to Africa’s halal market and fertile farmland to boost food security and trade ties.The Latest
All of the Lights: Ye Brings Old Kanye Hits to 50,000 Fans in Jakarta
Ye draws 50,000 fans to Jakarta for a globe-sized spectacle of lasers, fireworks, and hits spanning his two-decade career.
Nine Companies in Indonesia Stock Exchange IPO Pipeline, Healthcare Leads
Nine companies are in the IDX IPO pipeline, including four healthcare firms, after seven listings raised Rp 2.16 trillion this year.
Indonesia Cuts Gas Exports to Singapore to Prioritize Domestic Industries
Gas from Natuna and Sumatra has been delivered to Singapore through pipeline arrangements established in the late 1990s and early 2000s.
Footwear Factory in Banten Shuts Down, Affecting 1,100 Workers
The latest closure in Lebak highlights the continuing employment challenges facing Indonesia's labor-intensive footwear industry.
More Lula, or Back to the Bolsonaros? Brazil Votes in Cliffhanger
Lula, who is seeking a fourth term in office overall, has pitched himself as a bulwark against US interference and democratic backsliding.Most Popular
