Indonesia's Electric Vehicle Market on Threshold of Price Adjustments

Expiration of Tax Incentives to Impact EV Pricing

The Indonesian electric vehicle (EV) market is bracing for potential price increases in 2026 as tax incentives for imported electric cars come to an end ²

. The government's decision, while aimed at promoting local manufacturing, could significantly impact the pricing strategy of both imported CBU units and locally assembled models. As of January 2026, some EV prices remain unchanged, but industry insiders warn of forthcoming adjustments.

Government Policy and Local Content Requirements

The expiration of tax incentives particularly affects imported CBU electric vehicles that fail to meet the government's Tingkat Komponen Dalam Negeri (TKDN) or local content requirements. Vehicles meeting these criteria have been shielded from immediate price hikes, but analysts warn that even locally assembled models could see price increases in the range of tens of millions of rupiah. The government's policy aims to encourage local production while maintaining a competitive EV market.

Electricity Tariff Stability Provides Some Relief

In a related development, Minister of Energy and Mineral Resources Bahlil Lahadalia has assured that electricity tariffs will remain unchanged in early 2026, providing some stability for EV owners and prospective buyers ¹

. This decision comes as a relief to the EV industry, as stable electricity costs will help maintain the cost advantage of electric vehicles over their internal combustion engine counterparts.

Market Implications and Consumer Response

The impending price adjustments could have significant implications for Indonesia's EV adoption rate. While the initial price hike might slow down the rapid growth of EV sales, long-term industry growth is expected to continue due to environmental regulations and government support for green technology. Consumers are likely to accelerate purchases before prices rise, potentially leading to a short-term sales spike.