Indonesia's Electric Vehicle Market Continues Strong Growth

Increasing Adoption and Financing

The electric vehicle (EV) market in Indonesia is showing robust growth, driven by both consumer demand and supportive infrastructure development. As of October 2025, financing for electric vehicles through multifinance companies reached Rp17.64 trillion, representing a 2.70% month-on-month increase ²

. This growth is attributed to rising consumer interest in environmentally friendly vehicles, supported by government policies and expanding infrastructure.

Industry Response to Policy Changes

In response to the government's announcement to remove tax incentives for EVs starting in 2026, major global manufacturers are committing to local production to avoid import tariffs ³

. Companies like BYD, Volkswagen, and others are either establishing their own manufacturing facilities or partnering with local assemblers. This strategic move not only helps manufacturers avoid higher import taxes but also contributes to the country's economic development and job creation.

Market Outlook and Challenges

While the growth is promising, industry experts note that the current EV market is still dominated by upper-class consumers. To further expand the market, experts suggest that the government needs to develop comprehensive supporting infrastructure, including battery charging stations and insurance products for EVs ²

. The Indonesian Automotive Industry Association (Gaikindo) has set an ambitious target of 60,000 battery electric vehicle (BEV) sales by the end of 2025, representing a 39% year-on-year increase from the 43,188 units sold in 2024.