(Jakarta, 20th – Comprehensive Report) Muhammad Rachmat Kaimuddin, Deputy for Infrastructure and Transport at Indonesia’s Coordinating Ministry for Infrastructure and Regional Development, stated that several leading electric vehicle manufacturers, including BYD and Volkswagen, will produce electric vehicles in Indonesia to avoid import tariffs.
At a public forum held in Jakarta on Thursday, Rachmat pointed out: “If they do not produce in Indonesia before 2026, import taxes will increase. They can choose to build their own factories or cooperate with local assemblers.”
He revealed that nine brands have committed to produce electric vehicles in Indonesia, including Geely, BYD, Citroën, VinFast, GWM, Volkswagen, Xpeng, Maxus, and AION.
This statement is consistent with the comments made by Bahlil Lahadalia, Minister of Investment and Head of the Indonesia Investment Coordinating Board. He indicated that seven manufacturers are building production facilities: VinFast, Volkswagen, BYD, Citroën, AION, Maxus, and Geely, with a total investment of IDR 15.4 trillion and an annual capacity of 281,000 vehicles.
Meanwhile, GWM already has an assembly facility in Wanaherang, West Java, Xpeng has an assembly plant in Purwakarta, and BYD has also set up an assembly plant in Indonesia. Rachmat emphasized that as long as these vehicles are assembled locally (CKD) and not imported as completely built units (CBU), they are exempt from import tariffs.
The Ministry of Industry stated that the import incentives for CBU electric vehicles will end by the end of 2025. From 2026 onwards, manufacturers must produce a number of electric vehicles in Indonesia equivalent to their CBU import quota and comply with local content requirements (TKDN) to continue enjoying favorable policies.