INDEF recommends aligning regulations to support national vehicle production

Jakarta (ANTARA) - Executive Director of the Institute for Development of Economics and Finance (INDEF) Esther Sri Astuti said the government needs to introduce aligned regulations to support the national electric vehicle production plan. “The potential to develop electric cars or electric motorcycles already exists, but there are regulations that tend to overlap, and some even tend to be counterproductive,” she said when contacted by ANTARA from Jakarta on Saturday. As an example, she cited provisions in Minister of Home Affairs Regulation No. 11 of 2026 concerning the Tax Base for Motor Vehicles, Motor Vehicle Title Transfer Fees, and Heavy Equipment Tax as counterproductive to President Prabowo’s directive for national vehicle electrification efforts. At a time when incentive policies are still needed to support increased use of electric vehicles, she explained, the implementation of regulations that include changes to the electric vehicle taxation scheme could make people increasingly reluctant to switch to electric vehicles. She said overlapping regulations need to be aligned to support the realisation of the national electric vehicle production plan. According to her, the government still needs to implement incentive policies to encourage the use and production of electric-powered vehicles in Indonesia. She also highlighted other factors that need attention in efforts to produce a national-brand electric vehicle, such as addressing limitations in technology, research, and component supply chains. Esther conveyed the need to increase funding allocation for vehicle research and development to support the realisation of the national-brand vehicle production plan. “I believe there must be collaboration between the government as the regulator, universities that conduct research and development, and of course business actors,” she said. In addition, she continued, the government must pay attention to the availability of supporting facilities for electric vehicle use, such as charging stations, in various regions. “They must be available every certain number of kilometres, because then people who use electric cars or electric motorcycles will not be afraid of breaking down in the middle of their journey,” she said. President Prabowo Subianto, when delivering the Government’s Introduction/Statement on the Bill on the 2027 State Budget along with the Financial Note on Friday (14/8), outlined the government’s plan to accelerate the electrification of citizens’ mobility facilities. He also announced the government’s plan to provide incentives for domestic companies capable of producing one million electric motorcycles to encourage accelerated vehicle electrification as well as growth of the domestic automotive industry. President Prabowo previously also spoke about the national electric car production project, which is expected to be realised by 2028 at the latest.