2026 Electric Vehicle Incentives: Nickel vs LFP Battery Debate

Jakarta, KOMPAS.com – The government’s plan to provide electric vehicle incentives in 2026 remains under discussion. A key point of contention is the Government-Borne Value-Added Tax (PPN DTP) scheme, which could subsidise 40% to 100% of the tax depending on vehicle type and battery used. The policy is linked to efforts to support the national nickel industry’s downstreaming.

However, industry players urge the government to consider global battery technology developments before finalising its approach. Achmad Rofiqi, Deputy Chairman of the Public Relations and Education Division at Periklindo (Indonesian Electric Vehicle Industry Association), said incentives should not focus on a single battery technology.

‘We need to take a broader view. When discussing batteries, we must consider where the industry is heading and how technology is evolving. We hope the government does not impose policies based solely on its desires without considering real-world conditions,’ Rofiqi told KOMPAS.com recently.

He noted that global electric vehicle trends increasingly favour Lithium Iron Phosphate (LFP) batteries, especially for passenger cars. Rofiqi explained that LFP batteries are preferred due to cost efficiency and longer lifespan. ‘From cost efficiency and longer life cycle to wider adoption, economic laws dictate that higher demand lowers prices. Nickel-based batteries are more expensive than LFP batteries,’ he added.

Rofiqi also highlighted that lithium-based batteries offer better daily usage durability. He added that global battery technology is advancing rapidly, with several countries already developing sodium and solid-state batteries.