Electric Vehicle Incentives Under Evaluation, BKPM Ready to Maintain Investor Interest
The government, through the Ministry of Investment and Downstreaming/BKPM, is opening opportunities for new incentives in the green energy sector, including the electric vehicle industry. This policy is being prepared to maintain a conducive investment climate amid changes in regional tax regulations.
Minister of Investment and Downstreaming/Head of BKPM, Rosan P. Roeslani, stated that the government is striving to ensure investor interest, particularly in the electric vehicle sector, remains intact. This is important as several tax exemption facilities for electric cars are potentially ending.
These changes emerged following the issuance of Minister of Home Affairs Regulation No. 11 of 2026, which regulates the basis for imposing Motor Vehicle Tax (PKB), Motor Vehicle Ownership Transfer Fee (BBNKB), and heavy equipment tax. This regulation has raised concerns about a decline in investor and consumer interest in electric vehicles.
Rosan emphasised that incentive policies will continue to be evaluated gradually, especially after the electric vehicle ecosystem in Indonesia is deemed to be increasingly established. “If the ecosystem is running well, we will certainly evaluate whether incentives are still needed or not,” he said on Thursday (23/4/2026).
Furthermore, he explained that the provision of incentives is now not only focused on large-value investments. The government is also paying attention to sectors that have a broad impact on job absorption and environmental sustainability.
“Investments in the renewable energy sector with high job absorption are certainly a priority. For sectors like this, the government is open to providing incentives,” he clarified.
Meanwhile, data from the Indonesian Automotive Industry Association (Gaikindo) shows a positive trend in the electric vehicle industry. Throughout 2025, wholesale sales of pure electric cars reached 103,931 units, a 140.64% jump compared to the previous year, which recorded 43,188 units.
Nevertheless, new challenges arise from regional tax policies. Under the latest regulation, electric vehicles are no longer automatically exempt from PKB and BBNKB. Previously, under Minister of Home Affairs Regulation No. 7 of 2025, electric vehicles were not subject to those taxes.
However, local governments still have the authority to provide tax relief or incentives. This is regulated in Article 19 of Minister of Home Affairs Regulation No. 11/2026, which allows for policy differences across regions.
As a result, the amount of tax on electric vehicles could vary by region, depending on local government policies. The tax determination itself refers to the motor vehicle selling value (NJKB) and weight coefficient, which in the new regulation no longer differentiates electric vehicles from conventional internal combustion engine (ICE) vehicles.
With this dynamic, the government is striving to maintain a balance between regional fiscal policies and national investment attractiveness. Adaptive incentives are expected to sustain the growth of the electric vehicle industry while encouraging a transition to more environmentally friendly energy in Indonesia.