Chinese Electric Car Manufacturers Reportedly Not Yet Utilizing Local Components

KatadataOTO – Various electric car manufacturers from China will begin local assembly of their vehicles in the country starting in 2026.

It should be noted that in 2024 and 2025, a number of brands from China entered Indonesia by importing their vehicle lines completely built-up and receiving incentives.

However, this must be accompanied by a commitment to local assembly corresponding to the number of units sold domestically.

Incentives for imported electric cars are claimed to help drive the progress of the national automotive industry and make the selling price of electric cars more competitive.

Photo: BYD

Unfortunately, the Association of Indonesian Automotive Parts & Components Industries (GIAMM) revealed that to date, the electric car brands receiving these import incentives have not yet utilized local suppliers or component providers.

“To date, they have not localized. Perhaps it's because of the 40 percent Local Content Level (TKDN) requirement,” said Rahmat Basuki, Secretary General of GIAMM, to KatadataOTO on Monday (29/12).

It should be noted that for imported electric cars, the local assembly procedure itself is already counted as 30 percent TKDN. Therefore, it seems that localization is not a primary focus for manufacturers.

This TKDN rule has led many manufacturers to simply bring in components to be fully assembled in Indonesia by partnering with local assembly partners.

Regarding BYD, which has already established an assembly facility scheduled to operate in 2026, Rachmat also confirmed that there has been no agreement regarding its local suppliers.

“There is no clear information on BYD, whether they will start assembling domestically in 2026 or sell off their existing stock first,” said Rachmat.

The hope was that the import incentives for electric cars would actually yield positive results for the component industry next year.

Regulations related to TKDN criteria should be a focus, so that producers are more encouraged to utilize local component providers.

Photo: VinFast Auto

For your information, some of the brands required to conduct local assembly in 2026 are BYD, Xpeng, and GAC Aion. Then from Vietnam, there is VinFast.

VinFast has also inaugurated an assembly facility in the Subang area. Just like BYD, their factory is scheduled to assemble vehicles next year.

All of them must assemble units corresponding to the retail sales (distribution from dealers to consumers) of their completely built-up imported units.