Indonesia's Electric Vehicle Sector Faces Uncertainty Amid Unclear 2026 Incentives

Industry Confusion Grows as Government Policies Lag

The Indonesian electric vehicle (EV) industry is experiencing growing uncertainty as the government has yet to clarify its 2026 incentive policies ¹

³

Source 3

https://newssetup.kontan.co.id/news/industri-mobil-listrik-bingung-arah-insentif-2026-tak-kunjung-jelas

. The current lack of clear regulations regarding Value-Added Tax (VAT) on electric vehicles and replacement incentive schemes is creating significant challenges for industry players ¹

Source 1

https://industri.kontan.co.id/news/penjualan-mobil-listrik-terancam-drop-insentif-di-tahun-2026-masih-buram

.

Impact on Industry Decision-Making

The absence of official guidelines is causing confusion among manufacturers regarding pricing strategies and production planning ¹

³

Source 3

https://newssetup.kontan.co.id/news/industri-mobil-listrik-bingung-arah-insentif-2026-tak-kunjung-jelas

. Tenggono Chuandra Phoa, Secretary General of the Indonesian Electric Vehicle Industry Association (Periklindo), expressed concern that the lack of clear references is making it difficult for companies to determine their business policies.

Corporate Responses to Policy Uncertainty

Major industry players like Hyundai Motor Indonesia are adopting a cautious approach. Fransiscus Soerjopranoto, COO of Hyundai Motor Indonesia, stated that the company is continuing to monitor government policies while adjusting its business strategies to remain competitive in the evolving EV market ²

.

Regulatory Background and Industry Concerns

The current incentive policies for electric vehicles, which were implemented in 2025, are set to expire ³

. Industry stakeholders are now eagerly awaiting government clarification on whether these incentives will be extended or replaced with new schemes. The uncertainty is particularly concerning given the significant impact that incentive policies have on the adoption rate of electric vehicles in Indonesia.