"We also need to ensure that we do not just think about its use, that many Indonesians are switching to EVs. But we also have to think about how the whole ecosystem is built," he said here on Wednesday.
Considering that the automotive industry has great economic benefits for Indonesia, he added, the transition to electric vehicles must not solely rely on imported products.
Therefore, the government has prepared a strategy that covers the demand and supply of EVs.
On the demand side, the government is providing incentives, such as exemption from luxury goods sales tax (PPnBM) for electric cars, on the condition that they have a domestic component level (TKDN) of at least 40 percent.
The incentive does not apply to imports of products where there is no commitment to building an ecosystem in Indonesia.
On the supply side, the government has opened up opportunities for automotive companies to import electric vehicles with free import duties and PPnBM, but with certain conditions.
Companies that import electric vehicles must commit to producing electric vehicles in Indonesia and meet the TKDN requirements laid down in the provisions.
If the commitment is not met, the company will have to return the import duties and PPnBM it was exempted from paying through a bank guarantee mechanism.
"So, for example, they import in two years, 2024 and 2025, for 10 thousand cars. In 2026 and 2027, they will also produce 10 thousand cars with TKDN according to the applicable (requirements) at that time," Rachmat explained.
"If they do not fulfill it, currently, the government, through the Ministry of Investment, holds a bank guarantee. So, they must pay back the import duties and PPnBM that we have given. So, we think this can be fair," he added.
Rachmat further said that the progress of the transition to electric vehicles in Indonesia has shown positive developments.
Last year, electric car sales reached 4.98 percent of total national car sales, accounting for around 43 thousand units to 44 thousand units out of the total sales of 890 thousand units.
"So, we hope that in the future there will be more electric vehicle users. Are we done? Not yet. Today, we are just starting," he added.
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Translator: Fathur Rochman, Yashinta Difa
Editor: Arie Novarina
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