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.