GIAMM Reveals Remaining Challenges After Import EV Incentives Halted

According to GIAMM, the manufacturer currently recording high sales, namely BYD, has not yet reached an agreement with local suppliers.

“From a simple logic, localizing a part requires a certain volume scale to achieve component price competitiveness. Looking at the volume, it should be that only BYD is close,” said Rachmat Basuki, Secretary General of GIAMM, when contacted by KatadataOTO on Friday (29/08).

Meanwhile, BYD is scheduled to start operating its factory in 2026. Their flagship models will be in Completely Knocked Down (CKD) status and assembled at the facility located in Subang.

The deadline is approaching, and BYD is chasing a minimum Local Component Level (TKDN) target of 40 percent for its locally assembled models.

Photo : BYD

“Based on the conditions above, it's possible that if assembly in Indonesia happens in 2025, it could be in the form of simple CKD with no parts being localized,” said Rachmat.

If that condition occurs, Rachmat emphasized that the component industry will still not gain the expected benefits even though the electric car import incentives have been stopped.

For your information, BYD plans to locally assemble all models offered, from the Dolphin, Atto 3, Seal, Atto 1, Sealion 7 to the luxury Multi-Purpose Vehicle (MPV) Denza D9.

Photo : KatadataOTO

Currently, BYD states that the on-the-road price set for all models will remain the same after local assembly. 

BYD and other brands receiving import subsidies, such as Aion and Citroen, are required to assemble a number of electric cars equal to the quantity they import into Indonesia.

If this is not fulfilled, there is a bank guarantee, or a penalty to compensate for the incentives, that must be paid.