VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Deputy for Infrastructure and Transportation, Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves), Rachmat Kaimuddin, explaining to the press - 

Voinews, Jakarta - The additional incentive package contained in Presidential Regulation (Perpres) No. 79 of 2023 concerning Amendments to Presidential Decree No. 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle (KBLBB) Program is expected to boost Indonesia's electric vehicle (EV) production capacity, in line with the increase global demand for EVs.

This was stated by the Deputy for Infrastructure and Transportation, Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves), Rachmat Kaimuddin, Friday (15-11-2023).

This statement was made after the government had just issued a Presidential Decree which regulates the provision of incentives in the form of 0% import duty, 0% PPnBM and exemption or reduction of regional taxes for KBLBB, all of which apply to imports of KBLBB in complete condition (Completely Built-Up/CBU). and Completely Knock Down (CKD) with TKDN <40%.

“This is a win-win program that is quite progressive for Indonesia and investors. "We need to build economics of scale for the EV vehicle market in Indonesia, therefore the government has issued an incentive program to form an EV vehicle ecosystem in Indonesia," said Deputy Rachmat.

“How to provide incentives when the market has not yet been formed? "Therefore, the government provides opportunities for investors to build EV factories in Indonesia, and at the same time before the factories operate, they can market their imported EV products in Indonesia at more competitive prices," he explained.

Deputy Rachmat added that EV manufacturers can enjoy import incentive packages until the end of 2025. Furthermore, producers are required to fulfill the provisions for domestic EV production or "production debt" until the end of 2027, in accordance with the applicable TKDN provisions.

In this case, the Coordinating Ministry for Maritime Affairs and Fisheries also emphasized that the additional incentive package will also support the acceleration of EV adoption by providing more options or choices of EV product variations at more affordable prices for the Indonesian people.

“There are two things we need to pay attention to: options and affordability. "Currently the EV options available are still limited, and cannot meet the demand of the Indonesian market," explained Deputy Rachmat.

With additional incentive packages, manufacturers can present more EV models at competitive selling prices compared to conventional cars.

"Seeing the increasing trend in global EV demand, the Indonesian automotive industry needs to rush to transform and seize the opportunities of the global trend. "Don't let us lose the opportunity to become the center for the production and supply chain of environmentally friendly vehicles in Southeast Asia," added Deputy Rachmat.

It is known that global electric car sales have now reached 14% of total global car sales. Jumping from 3 million electric cars in 2020 to 10 million electric cars in 2022 (IEA, 2023). However, currently, Indonesia's EV manufacturing capacity lags behind neighboring countries.

It is recorded that Indonesia's production capacity reaches 34,000 cars, 2,480 buses and 1.45 million motorbikes per year. Meanwhile, electric vehicle production capacity in Thailand reaches - 240,000 per year.

According to a release received by Voice of Indonesia on Saturday, Indonesia is targeting two million electric passenger cars and 13 million electric motorbikes on the road by 2030. To achieve this target and ensure the smooth implementation of the additional incentive package, the government is currently coordinating with relevant ministries/agencies in the preparation and harmonization of technical regulations .

Previously the government had launched fiscal and non-fiscal incentives for consumers and producers. One form of incentive is a discount of IDR 7 million for all Indonesian people who want to buy a new electric motorbike that meets 40 percent of local component needs//VOI