Purbaya's Electric Vehicle Incentives: Government to Cover EV Purchase Tax

Finance Minister Purbaya Yudhi Sadewa has revealed that the incentives for electric vehicle purchases, soon to be rolled out by the government, will take the form of the government bearing the Value Added Tax, or PPN DTP.

He stated that the amount of the PPN DTP incentive from electric vehicle (EV) purchase transactions will range from 40% to 100%. The technical details will be elaborated by the Ministry of Industry.

“PPN DTP includes 100% and 40%, the scheme will still be discussed. It’s mainly for EVs, not hybrids,” said Purbaya at his office in Jakarta on Tuesday (5/5/2026).

Purbaya explained that the size of the PPN DTP incentive will consider whether the electric vehicle battery contains nickel or not.

“Batteries based on nickel and non-nickel will have different schemes, to be calculated by the Minister of Industry. Why is the subsidy for nickel larger? So that our nickel is utilised,” he elaborated.

According to Purbaya, the consideration of nickel content in electric vehicle batteries is because the government wants to invigorate the downstream processing of that critical mineral commodity.

“I once read in The Economist with the title ‘Indonesia’s dream of dominating the world battery market is lost because China doesn’t use nickel’, now we’re turning it around by using our nickel so that battery technology downstreaming progresses,” Purbaya revealed.

“And earlier I asked Mr Sigit from Danantara (CTO of Danantara Sigit Puji Santosa), he’s the expert, which is better between nickel and China batteries? He said nickel is best for the third generation, LFP is second generation. So that our resources are used maximally,” he emphasised.