Knock! Imported Electric Car Incentive Ends
Government Stops CBU Electric Car Incentives, Manufacturers Required to Produce Locally
The government through the Ministry of Industry (Kemenperin) has established a policy to stop providing incentives for imported electric cars in the form of Completely Built Up (CBU). This decision was announced by the Minister of Industry, Agus Gumiwang, when holding a press conference in Jakarta, Thursday (11/9/2025).
According to him, this year there will be no more CBU permits issued in the context of an investment scheme with benefits. “This year, God willing, we will no longer issue CBU permits in the context of investment schemes with benefits,” he said.
The incentives previously provided in the form of exemption from import duties and PPnBM will end in December 2025. After that, electric car manufacturers must switch to local production in accordance with the Domestic Content Level (TKDN) guidelines.
The Director General of the Metal Industry of the Ministry of Industry, Setia Diarta, also confirmed that the termination of this incentive would definitely be carried out. He explained that producers were required to build factories or carry out production domestically. This aims to increase the capacity of the domestic automotive industry and strengthen economic independence.
To date, there are six automotive companies that have entered the CBU import incentive program. Some of these brands include BYD Auto Indonesia, Vinfast Automobile Indonesia, Geely Motor Indonesia, Era Automotive Industry (Xpeng), National Assemblers (Aion, Citroen, Maxus, and VW), and Inchape Indomobil Energi Baru (GWM Ora).
“We will not extend CBU. CBU through several brands, brands like BYD and several other brands are building factories or producing here,” explained Setia Diarta.
Deadline until the end of 2025
For electric car manufacturers who still rely on CBU imports, they only have until December 31 2025 to enjoy incentives in the form of exemption from import duties and PPnBM. After that date, the official import incentive scheme ends and producers are obliged to switch to local production in accordance with the TKDN road map.
This obligation is contained in the Minister of Investment Regulation Number 6 of 2023 in conjunction with Number 1 of 2024, which is the reference for the roadmap for the electric vehicle industry in Indonesia. The aim of this policy is to encourage the development of the national automotive industry and strengthen the competitiveness of the environmentally friendly transportation sector.
Challenges and Opportunities for Manufacturers
The government’s decision to stop CBU incentives presents a challenge for producers who are not yet ready to switch to local production. However, behind these challenges, there are great opportunities to expand the market and improve the quality of domestic electric vehicle products.
It is hoped that producers can take advantage of this opportunity to build their own production infrastructure, reduce dependence on imports, and create added value for the national economy. Apart from that, this policy is also expected to be able to spur innovation and increase workforce competency in the automotive sector.
Policies that Maintain Balance
Even though this policy is considered a strategic step to strengthen domestic industry, the government continues to ensure that the transition process takes place gradually and does not cause instability in the automotive sector. In this way, producers will have sufficient time to adapt and prepare for an era of more independent local production.
