Nickel-Based EV Incentives Seen as Key to Strengthening National Downstreaming
Jakarta (ANTARA) - The government’s plan to provide full incentives for nickel-based (NMC) electric vehicles is regarded as a strategic move to strengthen the national nickel downstream industry. Bisman Bakhtiar, Executive Director of the Centre for Energy and Mining Law Studies (Pushep), believes this policy represents a crucial momentum for Indonesia to ascend from being a mere raw material supplier to becoming a primary player in the global battery industry value chain.
Bisman emphasised that without consistent policies to strengthen domestic value addition, Indonesia will remain stuck in the upstream position of the global supply chain. “These incentives are vital to increasing the added value of downstreaming. If not reinforced with policy, we will only remain a supplier of raw materials, despite possessing the world’s largest nickel reserves,” Bisman stated in Jakarta on Tuesday (26/5/2026).
Furthermore, he noted that this policy needs to be reinforced with Local Content Requirement (TKDN) regulations to ensure that incentives do not merely increase consumption, but truly drive the strengthening of the domestic battery and component industry. “We must not simply become a market. We must become a key player. Incentive policies or other facilities must be synchronised with the strengthening of the domestic component industry,” he added.
On the other hand, Bisman assessed that NMC batteries possess strong advantages, particularly for high-performance and long-range vehicles. This confirms NMC as one of the key technologies in the global electric vehicle industry. “The prospects for NMC remain very good due to its advantages. Although LFP technology is developing, nickel maintains a strategic position in the global electric vehicle market,” Bisman explained.
Previously, Finance Minister Purbaya Yudhi Sadewa mentioned that the government is preparing an electric vehicle incentive scheme in the form of 100 per cent Government-Borne Value Added Tax (PPN DTP) for nickel-based battery electric cars, and 40 per cent PPN DTP for non-nickel electric cars. Additionally, the government is preparing a subsidy for the purchase of electric motorcycles amounting to IDR 5 million per unit.
The incentives are planned to target approximately 200,000 electric vehicles, comprising both electric cars and motorcycles, and are targeted to commence in June 2026. “For cars with nickel batteries, the VAT is 100% covered. For non-nickel, it is lower. This is because we will support nickel downstreaming here so that our nickel is properly utilised,” said Finance Minister Purbaya Yudhi Sadewa in Jakarta on Wednesday (6/5/2026).
Meanwhile, the downstreaming of nickel into electric vehicle batteries is currently being accelerated by the Indonesia Battery Corporation (IBC). The company, which is also owned by MIND ID, is preparing the commercial operation date (COD) for an electric vehicle battery plant in Karawang in July 2026. The factory is being built through a partnership with Contemporary Amperex Technology Co. Limited (CATL) and Ningbo Contemporary Brunp Lygend (CBL) via a joint venture entity named Contemporary Amperex Technology Indonesia Battery (CATIB). This facility has a production capacity of up to 6.9 gigawatt hours (GWh) per year and is expected to be one of the main drivers in strengthening the national electric vehicle battery ecosystem.