IEU-CEPA Accelerated, BKPM States National EV Industry Prospects are Accelerating

The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) has stated that the electric vehicle (EV) industry is a sector that can be driven by the implementation of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).

For context, negotiations for the economic agreement between Indonesia and the European Union are scheduled to be completed by September 2025. The agreement is then targeted for signing in November 2026 and is expected to be implemented in early 2027.

The Deputy for Investment Promotion at the Ministry of Investment and Downstreaming/BKPM, Nurul Ichwan, noted that the implementation of IEU-CEPA opens wider investment opportunities for the electric vehicle industry and its ecosystem.

This optimism is driven by the respective strengths of both parties, Indonesia and the European Union, which can complement each other, thereby possessing the potential for rapid growth.

In the agreement’s fact sheet, he continued, electric vehicles are explicitly mentioned as one of the prospective sectors for investment.

On the other hand, Ichwan assessed that IEU-CEPA also opens opportunities to strengthen the automotive supply chain, as vehicle spare parts, including Indonesian products, will largely receive 0% tariffs when entering the European Union market.

Furthermore, IEU-CEPA is seen as creating space for cooperation in motor vehicle standardisation.

“Thus, the opportunities do not stop at electric vehicles, but can expand to components, parts, electronic systems, and even supporting manufacturing activities,” said Ichwan.