Purbaya Delays EV Incentives, Here's Why

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa outlined the latest developments regarding tax incentives for electric vehicles and motorcycles. He confirmed the incentives would be postponed by one month. “The EV incentive is still delayed by a month,” he said during a meeting at the Coordinating Ministry for Economic Affairs office on Tuesday (26 May 2026). Purbaya explained the delay was due to unresolved calculation details. Previously, he mentioned the government would soon roll out a government-borne VAT (PPN DTP) incentive for electric vehicle purchases. He stated the PPN DTP incentive would range from 40% to 100% of the transaction value, with technical details to be finalised by the Ministry of Industry. “The PPN DTP will vary between 100% and 40%, with the scheme still under discussion. It primarily applies to EVs, not hybrids,” Purbaya said at his office earlier, as reported on Tuesday (26 May 2026). The incentive amount will also consider the nickel content in the vehicle’s battery, he added. “Batteries based on nickel and those without will have different schemes, to be determined by the Minister of Industry. Nickel-based subsidies are higher to ensure our nickel is utilised,” he explained. According to Purbaya, the focus on nickel content aims to boost downstreaming of critical mineral commodities. “I read in The Economist that Indonesia’s dream of dominating the battery world was lost because China doesn’t use nickel. Now we’re using our nickel to advance battery technology downstreaming,” he said. “Earlier, I asked Mr Sigit from Danantara (CTO Danantara Sigit Puji Santosa), an expert on this, which is better between nickel and China’s batteries? He said nickel is third-generation, while LFP is second-generation. This is to maximise our resource usage,” he stressed.