How Electric Vehicle Taxes Will Hinder Electrification
Andry Satrio Nugroho from the EKONOM Institute for Development of Economics and Finance (Indef) believes that the electric vehicle tax policy has the potential to hinder the national vehicle electrification programme. According to him, the policy is not aligned with the government’s efforts to promote energy transition, especially amid the threat of an oil crisis.
“It seems there is a lack of clarity from the government regarding this policy because we see that the president is also promoting vehicle electrification,” Andry said after a discussion in Senayan, Jakarta, on Thursday, 23 April 2026.
Previously, the Ministry of Home Affairs issued Minister of Home Affairs Regulation Number 11 of 2026, which grants authority to regional governments to collect taxes on electric vehicles. Through this regulation, electric cars and motorcycles are no longer exempt from Motor Vehicle Tax (PKB) and Motor Vehicle Ownership Transfer Fee (BBNKB).
Andry assesses that the regulation also contradicts Law Number 1 of 2022 on Central and Regional Financial Relations (HKPD). In Article 7 of that Law, renewable energy-based vehicles are excluded from PKB objects. Therefore, he urges the government to clarify the legal basis for the policy.
He also reminds regional governments not to rush into issuing derivative regulations, whether through regional head regulations or regional regulations. According to him, the potential revenue from electric vehicle taxes is also relatively small.
“Because basically, it will not generate significant income even if this tax is still collected,” he stated.
General Secretary of the Indonesian Electric Vehicle Industry Association (Periklindo), Tenggono Chuandra Phoa, believes that handing over tax authority entirely to the regions risks creating policy disparities between areas. This situation can create uncertainty for consumers and industry players.
According to Tenggono, this risk is even greater because electric vehicle penetration in Indonesia is still below 5 percent of the total national automotive market, making it very sensitive to price changes. “This positive momentum needs to be maintained through consistent and coordinated policies,” he said.
Based on Periklindo’s internal study, regional tax increases have the potential to reduce the competitiveness of electric vehicles compared to conventional vehicles, hinder new investments in the electric vehicle and battery sector, and disrupt the achievement of national decarbonisation targets. In addition, this policy is also seen as creating uncertainty in the national industry distribution strategy.
In fact, in the last two years, the electric vehicle industry in Indonesia has shown significant development. This is marked by the entry of more than 15 new brands, the availability of more than 3,500 public electric vehicle charging stations (SPKLU), and global investment commitments reaching more than US$5 billion. “This development is also accompanied by job absorption in the manufacturing and local component sectors,” Tenggono said.