The Future of EVs: Evaluating Incentive Disparities Across Regions
JAKARTA - The disparity in electric vehicle (EV) policies between Jakarta and other regions is becoming increasingly evident, particularly following the issuance of new regulations that grant greater authority to local governments in determining incentives.
This situation is seen as potentially impeding the acceleration of eco-friendly vehicle adoption, as the support received by the public becomes uneven.
According to Andry Satrio Nugroho, Head of the Center for Industry, Trade, and Investment at INDEF, the government needs to pay serious attention to this disparity to ensure that EV adoption is not concentrated solely in major cities.
The situation has become even more complex following the issuance of Minister of Home Affairs Regulation (Permendagri) Number 11 of 2026, which changes the approach to electric vehicle incentives from a previously more uniform one to one that depends on the policies of each region.
Under the regulation, electric vehicles are no longer automatically exempt from Motor Vehicle Tax (PKB) and Motor Vehicle Ownership Transfer Tax (BBNKB), but remain subject to taxation.
However, the amount of tax imposed is not uniform because the central government provides room for local governments to determine incentives, ranging from reductions to exemptions.
Moreover, the regulation does not differentiate the coefficient between electric vehicles and conventional fuel-based vehicles, so in basic tax calculations, both are treated equally.
For example, DKI Jakarta still provides full incentives in the form of 0% PKB and exemption from BBNKB for electric vehicles.
On the other hand, regions with limited fiscal capacity may not be able to provide similar incentives, meaning the attractiveness of EVs to the public could differ significantly between regions, potentially creating new gaps in technology adoption.
Andry assesses that this condition could widen the gap in electric vehicle adoption.
Without competitive incentives, people in the regions will tend to stick with petrol (BBM)-powered vehicles, which are more affordable in terms of initial price.
“If there is no strong fiscal support in the regions, then EV incentives will be difficult to implement. This ultimately makes EV adoption happen only in certain areas,” he said.
He also highlighted that the success of non-fiscal policies, such as restrictions on emission-based vehicles through odd-even schemes or low-emission zones, greatly depends on the readiness of public transportation.
As a solution, Andry encourages the central government to introduce a special funding scheme that can help regions build an EV ecosystem, including electric-based public transportation.
One relevant option is the utilisation of revenues from motor vehicle emission excise taxes.
With such support, electric vehicle policies are expected not to run partially between regions, but rather to become a more equitable national movement in curbing transport sector emissions.