Electric Vehicle Import Incentives Halted, A Transition is Needed in 2026

KatadataOTO – The discontinuation of import incentives for electric cars is seen as potentially causing a drastic drop in electric car sales in Indonesia.

Especially if manufacturers receiving the import incentives for electric cars have not yet been able to realize the Local Content Requirement (TKDN) as per the agreement.

Electric car prices are likely to soar due to the imposition of import duties, which will impact sales.

Economists believe a policy transition is needed so that the prices of imported electric cars, which contribute significantly to sales, can be maintained.

Photo : KatadataOTO

First is a gradual reduction of benefits instead of an immediate one. It should be noted that currently, Completely Built Up (CBU) electric cars are not subject to import taxes.

“Tiered incentives based on TKDN, CO2, or efficiency performance. This way, brands that quickly start local production can maintain competitive prices,” said Josua Pardede, Chief Economist at Permata Bank, to KatadataOTO recently.

Next is the exemption of import duties for components and facilitating investment in tools and batteries within the country.

Then, to maintain appeal from a consumer perspective, Josua suggested other policy reliefs.

“For example, parking, toll, or odd-even traffic scheme incentives for locally made EVs. This is to keep the effective price gap rational while encouraging the learning curve of domestic manufacturers,” Josua emphasized.

For your information, the price increase for imported electric cars without incentives can vary. For a model with an on-the-road price of around Rp 190 million, the price tag could jump to Rp 300 million.

Due to an increase of Rp 200 million to Rp 300 million after import duties are imposed, prospective electric car consumers might switch to other options.

Photo : KatadataOTO

Besides electric cars, there are also hybrid and Plug-in Hybrid Electric Vehicle (PHEV) cars sold at competitive prices.

If the government wants to boost the use of pure electric cars in the country, there needs to be a proper transition before the import incentives are completely stopped.

This way, the price of electric cars, which were previously in demand by the public or could reach more consumers, will not increase sharply but rather gradually.