Indonesia to offer incentives for hybrid cars to boost electric vehicles

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Jakarta(ANTARA) –
Coordinating Economic Minister Airlangga Hartarto announced that the government plans to offer incentives for hybrid vehicles as it steps up the national push for electric vehicles.

“We are currently working on the incentive plan,” Hartarto said at the 2024 GAIKINDO Indonesia International Auto Show (GIIAS) auto exhibition in Tangerang, Banten province, on Wednesday.

Hybrid vehicles are currently subject to a luxury goods sales tax (PPnBM) of 6% to 12%. In contrast, fully electric vehicles (battery electric vehicles/BEVs) enjoy various incentives, including zero PPnBM.

The Indian government will provide a 10% value-added tax (VAT) borne by the government on electric vehicles that meet the minimum domestic content level (TKDN) of 40%.

On July 18, at the opening ceremony of GIIAS, Industry Minister Agus Gumiwang Kartasasmita said the Ministry of Industry will propose incentives for hybrid vehicles to relevant ministries.

“We work hard every day to calculate incentives and discuss them within the government; we make recommendations to the relevant ministries, in this case the finance ministry, especially on incentives for hybrid vehicles,” he said.

Not long ago, Katasamita said that the government-borne luxury goods sales tax (PPnBM DTP) incentives could address the stagnation in the automobile market and boost sales.

He said such fiscal incentives successfully drove domestic car sales up 113% between March and December 2021 and boosted sales by 95,000 units between January and May 2022.

Katasamita said incentives would be provided for vehicles that met certain local content requirements, with priority given to low-carbon emission vehicle types.

In addition, considering that domestic automobile sales have stagnated at around 1 million units per year over the past decade, support related to controlling interest rates may also increase sales of new four-wheel vehicles.

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