Chinese Car Brands Face Local Production Deadline: 2026

KatadataOTO – Several Chinese car brands have entered Indonesia enjoying the import incentive program for electric cars or EVs (Electric Vehicles). 

They can import CBU (Completely Built Up) electric cars without import duties. However, there are conditions that must be met, such as an investment commitment in the form of local assembly.

In short, by 2026, manufacturers must start producing vehicles domestically in accordance with the number imported during the program.

“The condition is that they are only allowed to import for two years and must provide a bank guarantee equivalent to the import duties and the Luxury Goods Sales Tax (PPnBM),” said Rachmat Kaimuddin, Deputy for Coordination of Basic Infrastructure at the Coordinating Ministry for Infrastructure and Regional Development of the Republic of Indonesia in Jakarta some time ago.

Photo : KatadataOTO

Chinese car manufacturers currently enjoying the electric car import incentive program are BYD (Build Your Dreams) and GAC Aion.

BYD has become the best-selling brand in the country because the car prices offered can be competitive as there are no additional import costs charged.

In a short period of time, their premium sub-brand Denza was also introduced. The Denza D9 is planned to be locally assembled as well.

The BYD factory in Subang is reportedly scheduled for completion at the end of 2025. All models currently marketed by BYD will be locally assembled at the facility, which has a capacity of 150,000 units per year.

Meanwhile, GAC Aion has a factory in Purwakarta with a production capacity of 20,000 units per year. One step ahead of BYD, GAC Aion's facility has already started operations on June 10, 2025.

“So if they do not start production by 2026, we will ask them to pay it back (the fine),” he asserted.

For your information, the electric car import incentive program is scheduled to end at the end of 2025. Previously, referring to the Minister of Industry Regulation (Permenperin) Number 6 of 2023, this scheme was set to end at the end of the 2024 fiscal year.

Photo : BYD

Considering several factors, the program was extended until the end of 2025 in accordance with the Minister of Finance Regulation (PMK) Number 135 of 2024.

Article 2 states that the Luxury Goods Sales Tax (PPnBM) owed on imported CBU and CKD (Completely Knocked Down) electric cars by business actors, will be borne by the government for the January-December 2025 tax period.

However, there is still a chance for it to continue in order to support the accelerated transition to environmentally friendly vehicles and attract investor interest.