The Indonesian government aims to achieve carbon neutrality by 2060 and has emphasized electrification of the transportation sector. The government has set a production target of Low Carbon Emission Vehicles (LCEVs, including battery EVs (BEV), hybrid vehicles (HV), and plug-in hybrid vehicles (PHV)) at 1 million units in 2035. The government also aims for BEVs accounting for 20% of automobile production by 2025.

  To promote electrified vehicles, the government will continue its tax incentive measures through 2025. EVs will enjoy tax reductions and exemptions for value added tax, import duties and luxury goods sales tax while HVs will receive a tax reduction of the luxury goods sales tax.

  Sales of EVs in Indonesia totaled 43,104 units in 2024, increasing around 2.5 times from the previous year. About 90% of these EVs are the products of nine Chinese OEMs. At the same time, sales of HVs amounted to 54,917 units in 2024, 96% of which were the models of Japanese OEMs.

  Regarding activities related to EV production, Vietnam’s VinFast as well as China’s BYD and GAC Aion have been building new EV plants in Indonesia and plan to start manufacturing EVs by the end of 2025. PT VKTR Teknologi Mobilitas Tbk (VKTR), a subsidiary of an Indonesian industrial conglomerate, has started the construction of a commercial electric vehicle production facility.

  In addition to EV production, Indonesia focuses on local production of EV batteries by utilizing nickel ore found in the country. Hyundai Motor Group and LG Energy Solution, a collaboration of SAIC Group and CATL with a local manufacturer, as well as Indonesia Battery Corporation and CATL are cooperating to build battery facilities, respectively.

  According to statistics from the Association of Indonesia Automotive Industries (GAIKINDO), 2024 production declined by 14.3% year-over-year (y/y) to 1.197 million units and sales fell by 13.9% y/y to 866,000 units. GAIKINDO has set the 2025 sales target at 900,000 units, up 4% from the previous year.

GAC Aion’s Aion V (launched in November 2024, compact electric SUV)	Indonesia's vehicle production, sales and exports (Source: Created by MarkLines based on GAIKINDO's data)

Related reports:
ASEAN Vehicle Sales and Production Update (Q1 2025) (May. 2025)
Indonesia International Motor Show 2025 (IIMS 2025) (Mar. 2025)
ASEAN (2) Increase in Chinese car production (Oct. 2024)
ASEAN (1) EV Promotion Policies; Increasing Entry of Chinese OEMs (Sep. 2024)
GAIKINDO Indonesia International Auto Show 2024 (Aug. 2024)
Indonesia: BYD, MG, Great Wall, Chery and VinFast entering EV market (Apr. 2024)