Indonesia is planning a slew of incentives for electric-car manufacturers and drivers, to help bolster a sector that has already lured investment from Toyota Motor Corp. and SoftBank Group Corp., according to a draft government strategy seen by Bloomberg.
The measures are aimed at accelerating the adoption of battery-powered cars in Indonesia and building a base for the production and export of such vehicles. They include lower taxes for manufacturers and buyers of electric cars, and benefits for EV owners, such as special parking areas, the draft that’s only awaiting the president’s approval shows.
The country is vying with nearby Singapore and Thailand to become the dominant force in Southeast Asia for electric cars, part of an effort to fortify the local economy and reduce reliance on imported oil. Indonesia, one of the largest untapped markets for electric vehicles, wants EVs to constitute a quarter of its car production by 2030 as it tries to bring in more global companies.
The rules would change taxation of vehicles so they would be levied based on fuel consumption and carbon emissions instead of body type and engine size, favoring electrified vehicles. Under current rules, a $65,000 BMW X3 sDrive sport utility vehicle carries a lower luxury tax rate than a $58,000 Hybrid-powered Toyota Camry because sedans have been considered a more luxurious car type.
The new rules will also require electric-car makers to gradually increase the amount of locally produced parts to 80% by 2030, according to the draft. Producers of electric motorcycles would need to meet that requirement already in 2026.