CBU Import Incentives to End in 2025 — Indonesia’s Next Step in EV Industrialization
By BreakingID News Desk – November 3, 2025
The Indonesian government has confirmed that import incentives for fully built-up (CBU) electric vehicles (EVs) will expire by December 31, 2025, marking a turning point in the nation’s push toward local EV manufacturing. The decision, announced by the Ministry of Industry (Kemenperin), aims to accelerate domestic production and reduce dependency on imported electric cars.
A Shift Toward Domestic Production
Since 2023, Indonesia has offered a series of tax reductions and import relaxations for automakers bringing in EVs under the CBU scheme. These measures were designed to jump-start EV adoption and attract foreign manufacturers to test the local market.
However, the new directive states that, after 2025, only locally produced EVs—with a minimum local content (TKDN) of 40%—will qualify for government incentives. Automakers that continue importing CBU units will face higher import duties and lose access to fiscal subsidies.
According to Kemenperin’s Director-General of Metal, Machinery, Transportation Equipment, and Electronics, this policy is part of Indonesia’s long-term vision to become a regional EV manufacturing hub by 2030.
“We welcome automakers to keep investing, but the future of EV incentives will prioritize production inside Indonesia,” said the official during a press briefing in Jakarta.”
What This Means for Automakers
The upcoming regulation directly affects several global brands currently selling imported EVs in Indonesia—such as BYD, Tesla, Hyundai, and Neta—as well as new entrants like Jaecoo and Chery.
Manufacturers that plan to retain incentives must establish assembly lines or full-scale factories in Indonesia. Several companies have already responded positively:
- Hyundai operates its plant in Cikarang, West Java, assembling the Ioniq 5 and Ioniq 6 locally.
- Wuling produces the popular Air EV and Binguo EV in Bekasi.
- BYD has announced plans to build its first Indonesian EV assembly facility in Karawang, expected to open in 2026.
- Chery is considering shifting partial production of the new Jaecoo J5 EV to Indonesia by 2026 to maintain competitive pricing.
For automakers that rely heavily on imports, however, the rule could pose challenges. “Indonesia remains a price-sensitive market. Local production requires significant investment and time,” said an industry analyst quoted by Kontan.
Consumer Impact: The Clock Is Ticking
For Indonesian consumers, the transition could bring short-term price fluctuations in imported EVs. Currently, CBU electric cars enjoy reduced import duties sometimes cut by more than 50% as part of the government’s incentive scheme.
Once those benefits end, imported EVs are expected to become significantly more expensive. Experts estimate a potential price increase of 10–20% for non-locally produced models if manufacturers fail to localize production by 2026.
That means 2025 could be the final window for buyers to purchase imported EVs at lower prices. Automakers are likely to launch limited-time discounts and pre-order campaigns throughout next year to maximize sales before the regulation takes effect.
Still, the government insists that long-term benefits will outweigh short-term challenges. By producing EVs domestically, Indonesia can create new jobs, technology transfers, and more stable prices in the future.
Why Indonesia Is Taking This Step
Indonesia holds one of the world’s largest nickel reserves, a key raw material for EV batteries. The government has consistently emphasized using this advantage to build a complete EV ecosystem, from mining and refining to battery and vehicle production.
The country has already attracted significant foreign investment in the EV supply chain. Partnerships involving CATL (China), LG Energy Solution (Korea), and PT Antam (Indonesia) have launched large-scale projects to build battery manufacturing and recycling facilities.
By phasing out CBU imports, the government seeks to ensure that these upstream investments translate into real downstream output—that is, vehicles assembled and sold locally.
““We don’t want to be just a market for foreign EVs. We want to build, export, and lead the region,” said Industry Minister Agus Gumiwang Kartasasmita during a recent interview.”
Industry Readiness and Challenges
While the policy aligns with Indonesia’s industrial roadmap, industry players are calling for clear transitional guidelines. Many automakers argue that setting up new production facilities within one year may be difficult due to land, logistics, and certification processes.
Financial institutions are also waiting for regulatory clarity. Adira Finance, one of Indonesia’s largest vehicle financiers, said it would “expand EV financing more aggressively once the post-2025 policy framework becomes clear.”
Meanwhile, Gaikindo (Indonesian Automotive Industry Association) confirmed that the 40% TKDN requirement will remain valid until at least 2026, giving automakers a transitional buffer to adjust.
The Road Ahead
As the countdown to the end of CBU import incentives begins, Indonesia stands at a critical juncture in its electric mobility journey. The next 14 months will test how fast automakers can localize production and how effectively the government can balance industrial policy, market demand, and sustainability goals.
If successful, the 2025 policy could transform Indonesia into one of Southeast Asia’s leading EV manufacturing bases, rivaling Thailand and Vietnam.
For consumers and investors alike, one message is clear:
The future of Indonesia’s EV industry will be built at home, not shipped from abroad.
📚 References :
- Kementerian Perindustrian Republik Indonesia. (2025). Kebijakan insentif kendaraan listrik dan roadmap produksi lokal 2025–2030. Jakarta: Direktorat Jenderal ILMATE.
- Kontan. (2025, October 28). Industri otomotif siapkan strategi jelang penghentian insentif impor mobil listrik CBU akhir 2025.
- Oto.com. (2025, October 29). Pemerintah setop izin impor mobil listrik CBU akhir 2025, wajibkan produksi lokal dengan TKDN 40 persen.
- Gaikindo. (2025, October). Aturan TKDN mobil listrik tetap 40 persen hingga 2026 dan dampaknya terhadap industri otomotif nasional.
- Pasardana.id. (2025, September 23). Indonesia tetapkan standar wajib uji keselamatan baterai kendaraan listrik roda dua.
- VOI.id. (2025, October 30). Jaecoo J5 EV resmi meluncur di Indonesia, harga mulai Rp200 jutaan.
- Adira Finance. (2025, October). Strategi pembiayaan kendaraan listrik menanti kepastian regulasi pemerintah 2025.
- Sindonews Otomotif. (2025, October 31). Gaikindo: Aturan TKDN mobil listrik tetap 40 persen hingga 2026, ini dampaknya!