Indonesia develops local e-vehicle sector

• A presidential decree has created a number of incentive programs for EV production with local component requirements rising over the years.

Indonesia might witness fast electric auto sector development due to presidential decree 55/2019, which puts stimulation of e-vehicle industry close to energy security and efficiency, as well as eco-friendliness.

According to the recent laws, the country is anticipating e-vehicles to substitute 20 percent of the automobile market place in about five years.

The decree provides support to e-vehicle importers for a restricted period. At the same time, the majority of subsidies are aimed at autos assembled of locally manufactured parts. The programs are also meant for charging point installers, batt waste recyclers and swapping service providers, as well as businesses that speed up the rollout of other e-vehicle infrastructure.

Regarding manufactured parts, in a year’s time 4 wheel autos are supposed to be no less than 35 percent manufactured locally, with the requirement reaching 80 percent by 2030. As for 2 wheel e-vehicles, they need to possess minimum 40 percent of locally made components to make up for subsidy starting from 2023, three years later this number will reach 80 percent.