The incentive, which will be effective from January 1, 2025, is also in line with the government's commitment to net zero emissions.
According to Hartarto, around 80 thousand units of both battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) were used year to date.
"Compared to combustion engines, of which around 850 thousand units were used, so it (the use of EVs) was only around 10 percent. Thus, we want to increase the number (of EV users in the country)," he said at the Halim Perdanakusuma Air Force Base in Jakarta on Tuesday.
He made the remarks after seeing off President Prabowo Subianto, who left for a working visit to Cairo, Egypt, on Tuesday.
In addition, Hartarto said, the provision of the EV incentive is expected to be a good start for the growth of supporting industries, such as the electric vehicle battery industry.
For example, Indonesia has a company producing electric vehicle batteries in Morowali, Central Sulawesi.
If the incentive increases the adoption of EVs, there would be a positive impact on the domestic industry, the minister added.
"If we can do that, we can achieve the 60 percent of local content requirement (TKDN). So that is the target set by the government to encourage increasing TKDN and encourage interest in electric vehicles," he explained.
On December 12, 2024, Industry Minister Agus Gumiwang Kartasasmita announced the government's incentive to cover 3 percent of the luxury tax burden for hybrid vehicles, starting January 1.
To provide the incentives, the government requires Rp840 billion.
Kartasasmita said that in the Industry Minister's Regulation Number 36 of 2021 concerning Low Carbon Emission Four-Wheeled Motor Vehicles, the government has set the value of the local component level (TKDN) that hybrid car manufacturers will have to meet to join the program. (INE)
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Translator: Livia Kristianti, Yashinta Difa
Editor: Atman Ahdiat
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