GIAMM Reveals Remaining Challenges After Import EV Incentives Halted

KatadataOTO – The import incentives for electric cars currently provided by the government are being utilized by several brands such as BYD and GAC Aion.

Detailed regulations regarding electric car incentives are stipulated in the Minister of Investment Regulation Number 6 of 2023 in conjunction with Number 1 of 2024.

On the positive side, brands receiving incentives can sell their vehicles at competitive prices for Indonesian consumers, even though the units are still fully imported.

Since the arrival of Chinese brands like BYD, many new electric car models have emerged with relatively low prices compared to similar products in the same class.

Photo : KatadataOTO

The government waives import duties and luxury goods sales tax (PPnBM) for products if they meet the requirements, namely that the manufacturer must have a commitment to conduct local assembly in Indonesia.

However, as a result, the automotive component industry is said to be suffering. Layoffs (PHK) have subsequently become widespread.

Supposedly, with the end of the electric car import incentives, incentive-receiving brands like BYD will start absorbing local components next year and reinvigorate the automotive component industry.

However, it seems the Association of Indonesian Automotive Parts & Components Industries (GIAMM) does not believe that stopping the electric car import incentives will automatically revive the component industry. There are still obstacles to face.