The Government Prepares Additional Incentives for Brands That Have Met Local Content Requirements

KatadataOTO – The government plans to create new incentives to attract investors to the electric vehicle industry in Indonesia. One of these is by providing additional facilities for those who already use a higher TKDN (Local Content Level).

It is hoped that the automotive industry, especially electric vehicles, can accelerate further.

“So we are changing the concept so that the higher the TKDN, the higher the incentive. We will focus on this policy,” said Rosan Roeslani, Minister of Investment and Downstreaming/Head of the Investment Coordinating Board (BKPM) in Jakarta (06/05).

This step is expected to motivate investors to immediately increase the TKDN in the country. So that Indonesia's ambition to become one of the world's electric vehicle production centers can be realized soon.

Committed to Protecting Investors

Photo : Courtesy

Not only that, the government has also prepared various new strategies to protect investors from various challenges. One of them is by revising regulations that are considered to hinder manufacturers' development.

This was clearly stated by Agus Gumiwang Kartasasmita, the Minister of Industry. He explained that the regulation is contained in Presidential Regulation Number 46 of 2025, which was just signed by the president last week.

The most beneficial change for investors is in article 66 paragraph 1, which states that Ministries / Institutions / Regional Apparatus / other Institutions are required to use domestic products, including national design and engineering.

Meanwhile, paragraph 2 states that the obligation to use domestic products as referred to in paragraph 1 for industrial products is carried out with the following provisions

(a) use domestic products that have a TKDN value of at least 25 percent if there are domestic products that have a combined TKDN value plus the Company Benefit Weight (BMP) value of at least 40 percent.

(b) in the event that domestic products with a combined TKDN value plus BMP value of at least 40 percent are not available or the volume is insufficient for the needs, then domestic products with a TKDN value of at least 25 percent shall be used.

Photo : KatadataOTO

(c) in the event that the domestic products referred to in letters (a) and (b) are not available or the volume is insufficient for the needs, then domestic products with a TKDN value of less than 25 percent shall be used.

“Paragraph 2b is new and proves that the government is now more operative, innovative, and progressive in the industrial environment. We are truly striving to protect the domestic industry,” he said.