Japanese Brands Invited to Utilize Electric Vehicle Import Incentives

KatadataOTO – The government has prepared a number of supporting policies to accelerate the transition from conventional to electric-powered vehicles.

There is a 10 percent tax cut specifically for manufacturers of electric cars that have conducted local assembly or sell CKD (Completely Knocked Down) cars.

If a brand still wants to import, the government also provides leeway. However, the manufacturer must commit to locally assembling the electric cars by 2026, corresponding to the number imported into the country.

This policy then made it easier for Chinese manufacturers like BYD (Build Your Dreams) to achieve satisfactory sales results in a short time, as prices could be reduced thanks to incentives.

Photo : KatadataOTO

On the other hand, Japanese manufacturers who invested earlier are actually lagging behind when it comes to electric car products.

Seeing this, the government emphasized that the policy for import incentives for electric cars, which ends in 2025, is open to many manufacturers, including Japanese brands.

“If there are good ones (Japanese brands), why not. For me, the important thing is electrification, for decarbonization and our energy self-sufficiency,” 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.

Currently, the majority of Japanese manufacturers are indeed focusing on hybrid cars for several reasons. According to them, HEVs (Hybrid Electric Vehicles) are still the right solution for consumers who want to use environmentally friendly vehicles.

Brands like Toyota have one electric car, the bZ4X, but it is still fully imported or CBU (Completely Built Up) from Japan.

Honda has also just introduced the e:N1 electric car. However, this model is leased and targets fleet customers at a cost of around IDR 22 million per month for a minimum of five years.

If Japanese manufacturers want to start focusing on offering electric cars, Rachmat stated that they can take advantage of the import incentive program.

Photo : HPM

“The important thing is that in the future, they produce in Indonesia, (have) TKDN (Local Component Level) so that our industry continues to grow. We also don't want to just depend on imports,” Rachmat emphasized.

For your information, electric car import incentives in the country are open to various countries that have international cooperation with Indonesia.

As regulated in the Minister of Investment and Downstreaming/Head of BKPM Regulation Number 1 of 2024, it is stated that business actors receive exemptions from Luxury Goods Sales Tax (PPnBM) and import duties for CBU imports until a certain deadline, which is December 31, 2025.