Indonesia Grants Incentives for CBU, CKD Electric Vehicles

TEMPO.CO, Jakarta - The Indonesian government decided to grant incentives for imported completely built-up (CBU) and completely knocked down (CKD) electric vehicles in the form of the luxury goods sales tax (PPnBM).

These provisions are set forth in the Investment Minister or the Investment Coordinating Board Head's Regulation No. 6 of 2023. Article 2 (1) notes that incentives may be granted to business actors for the importation of battery-powered CBU vehicles (KBL) in a certain amount and within the incentive utilization period.

The incentives for importing CKD electric cars are contained in Article 2 (2) which states that business actors can receive incentives for a certain number of EVs assembled in Indonesia with a minimum local content requirement (TKDN) of 20 percent and a maximum of 40 percent.

However, to be eligible for this incentive, the economic operators must meet several conditions as specified in Article 2 (4), such as the TKDN level. This commitment must also be met within the incentive utilization period, which is until January 1, 2026, and the EVs should be produced no later than December 31, 2027. 

Additionally, the vehicles produced must be of at least the same quantity and technical specifications as those imported. The business actors must also meet several investment criteria.

The use of incentives for the import of electric vehicles, according to Article 2 (5), is valid from the date of issuance of the regulation until December 31, 2025.

ERWAN HARTAWAN

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