TEMPO.CO, Jakarta - The Indonesian government has imposed duty free policy on incompletely knocked down (IKD) electric vehicle (EV) imports, which means parts are imported to be assembled domestically. A Finance Ministry representative on Friday said this policy is hoped to establish Indonesia as an export and production hub for EVs.

“This policy is hoped to turn Indonesia into a hub for electric vehicle production and exports,” said the Finance Ministry’s head of fiscal policies, Febrio Kacaribu, on March 4.

The import duty-free policy is overseen under the Finance Minister’s Regulation No.PMK-13/PMK.010/2022 that was officially passed on February 22.

Febrio said this incentive coincides with the country’s roadmap for electric development and its main components such as electrical motors, batteries, and converters.

Based on the electrification roadmap, the production of cars and motorcycles including low carbon emission vehicles (LCEV) in 2020 is targeted at 10 percent each, which is expected to increase to 20 percent by 2025.

At the end of 2022, the production stage for all vehicle segments will enter complete assembly, except for the commercial segment or buses and trucks, which have advanced to the IKD (incompletely knock down) stage. This means a number of the main vehicle components can be produced domestically.

This year, the government targets the electric car exports to reach 250 thousand units, and hopes to see the number grow to 310 thousand units in 2025. Meanwhile, electric motorcycle exports this year are targeted to be 750 thousand units, and increase to 1.1 million units in 2025.

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DICKY KURNIAWAN