Indonesia Opens Red Carpet to Become ASEAN Automotive Production Hub
Finance Minister Purbaya Yudhi Sadewa has confirmed the government will continue various incentives for electric vehicles (EVs) to accelerate the energy transition and strengthen the national automotive industry. Speaking at the GAIKINDO International Automotive Conference in Tangerang on Tuesday, he revealed that President Prabowo Subianto is set to launch a new stimulus package for EVs, including support for approximately 500,000 electric motorcycles and luxury tax (PPnBM) incentives for electric cars.
Purbaya stressed that the policy is part of a long-term strategy to significantly reduce Indonesia’s dependence on oil imports amid rising global energy price fluctuations and geopolitical uncertainty. He noted that the national EV industry has shown a positive trend, with the market share of electric vehicles increasing nearly fifteen-fold over the past four years.
Beyond adoption, the government is focused on ensuring the transition creates greater economic value by attracting new investment, expanding employment, increasing local content, and strengthening manufacturing competitiveness. Purbaya cited the rapid realisation of Hyundai’s investment as an example of improved cross-ministerial coordination, where the process from commitment to groundbreaking took only about four months.
He extended an open invitation to global automotive manufacturers to expand their investments in Indonesia, offering competitive incentives for companies willing to relocate or expand production facilities to the country. The automotive sector currently employs around 1.5 million workers and has an installed production capacity of 2.6 million vehicles per year, with significant multiplier effects across steel, electronics, chemicals, logistics, and financial services.
Purbaya concluded by emphasising that the industry’s growth is closely tied to national economic expansion and domestic purchasing power, urging stakeholders to maintain the country’s growth momentum to support the sector’s advancement.