Indonesia to end incentives for imported CBU BEVs in 2026

The Indonesian government has confirmed that it will stop providing incentives for imported completely built-up (CBU) battery electric vehicles (BEVs) from 2026.

Under the current policy, CBU BEVs will still be exempt from import duties and luxury goods sales tax until the end of 2025, provided that manufacturers commit to producing the same number of vehicles domestically as they import.

Minister of Industry Agus Gumiwang Kartasasmita said that it will no longer issue import permits for CBU BEVs under the investment scheme to receive incentives.

Director general of the Metal, Machinery, Transport and Electronics Industry (ILMATE) Setia Diarta also affirmed that companies currently benefiting from the scheme must shift to local production of BEVs.

There are currently six companies enjoying this incentive with a total committed investment capital of IDR15.52 trillion (about $947 million) and a total production capacity of 305,000 units.

Earlier, Mahardi Tunggul Wicaksono, director of the Marine, Transport and Defence Equipment Industry (IMATAP), emphasized that manufacturers are obliged to begin producing BEVs domestically and comply with local content requirements (TKDN) starting in 2026.

This move is seen as a step to promote the domestic electric vehicle industry, reducing dependence on imported vehicles. Foreign carmakers such as BYD or Geely will have to speed up their investment plans, if they do not want to lose their expanding market share in Indonesia.