Indonesia promotes domestic EV industry based on new Presidential Decree

The Presidential Decree No. 55 of 2019 on the promotion of battery electric vehicles (EVs) for ground transportation was enacted in Indonesia on August 12, 2019. This presidential decree, consisting of 37 articles in total, aims to promote the deployment of electric vehicles and its industry development in the county. It is specifically designed to achieve the following objectives.

• • Promoting the development of the electric vehicle industry for ground transportation
  • Providing various incentives
  • Developing the charging infrastructure and electricity tariff structure for battery electric vehicles
  • Complying with the technical regulations for battery electric vehicles
  • Meeting the environmental protection requirements

This presidential decree will take effect immediately, and a number of ministerial regulations with detailed provisions are expected to be enacted withing the next year. The original text of this regulation is downloadable at the following URL.
https://setkab.go.id/wp-content/uploads/2019/08/Perpres-Nomor-55-Tahun-2019-Salinan.pdf

Incentive Programs

The Presidential Decree provides a wide range of financial incentives as follows.

1. 1. Tariff incentives on imports of battery electric vehicles built from complete or partial knockdown, or major components with certain quantities and durations
   2. Luxury goods sales tax incentives
   3. National and local tax exemption or reduction incentives
   4. Import tax incentives for equipment, products and materials
   5. Financial export incentives
   6. Government-controlled import tax incentives on imports of primary or secondary materials used in the production process
   7. Manufacturing incentives for public electric vehicle charging stations (SPKLU)
   8. Export cost incentives
   9. Financial incentives for research, development, and technology innovation activities, as well as for hiring professionals involving with battery electric vehicle components industry
   10. EV parking incentives to allocate reserved spaces designated by local government
   11. Reducing charging costs at public electric vehicle charging stations
   12. Providing subsides for the construction of public electric vehicle charging station infrastructure
   13. Issuing professional competency certification for personnel engaging with battery electric vehicles production
   14. Publishing product certification and/or technical standards for battery electric vehicle industry enterprises and battery electric vehicle parts industry enterprises

The Other non-financial incentives are provided as below.

1. 1. Granting an exemption from restrictions on use of particular highways
   2. Delegating the manufacturing rights on relevant battery electric technologies for which the central and local governments possess patents
   3. Ensuring or guiding the operational activities of the industrial sector to continue or facilitate the logistics works or production activities by key national industrial enterprises

NOTE:
On March 20th, 2023, Regulation of the Minister of Industry No. 06/2023 on Guidelines for Government Assistance for Battery Electric Motorcycles was promulgated in Indonesia. See more details below.
Indonesia Promulgates Regulation on Subsidy for Purchasing Electric Motorcycles

Parts Procurement

Manufacturers of the battery electric vehicles and their component must gradually increase the domestic component procurement percentage of end products as follows.

Environmental requirements for waste batteries

Waste batteries from electric vehicles must be recycled or properly disposed in accordance with applicable national laws and regulations. The measures will be carried out by permitted waste disposal companies, electric vehicle manufacturers’ plants, and electric vehicle parts manufacturers’ plants. Companies that conduct these recycling and disposal activities will be evaluated for their environmental contributions. The details of the evaluation will be determined separately by the Ministry of Environment and Forestry.