February 5, 2026 | 07:37 pm
TEMPO.CO, Jakarta - The Ministry of Industry has yet to confirm the presence of automotive incentives for this year. Setia Diarta, the Director General of Metal, Machinery, Transportation Equipment, and Electronics Industry, stated that the incentive proposal has been submitted to the Ministry of Finance.
"The minister has also sent a letter to the Ministry of Finance to help improve the automotive industry sales," he said at JIExpo Kemayoran, Jakarta, on Thursday, February 5, 2026.
Previously, Minister of Industry Agus Gumiwang Kartasasmita sent a letter regarding the proposal for automotive incentives to Finance Minister Purbaya Yudhi Sadewa in late December 2025. The incentives are expected to be reinstated for the Luxury Goods Sales Tax (PPnBM) and Value Added Tax (VAT).
However, Setia mentioned that tax incentives for Low Cost Green Cars (LCGC) will continue until 2031. Meanwhile, those not classified as low-priced are still uncertain. "It is still under discussion, so we have to wait," he said.
Coordinating Minister for the Economy Airlangga Hartarto stated that automotive incentives, especially for electric vehicles, will not be continued. The government disbursed a total of Rp7 trillion in incentives by 2025.
Airlangga mentioned that several brands such as Build Your Dreams (BYD), VinFast, and Hyundai have invested in establishing factories in Indonesia. "Hence, this will be encouraged for national cars in the future," Airlangga said on Wednesday, January 14, 2026.
Attention to automotive incentives also considers the anticipated decline in car sales in 2025. Wholesale vehicle sales from the factory to dealers in 2025 reached 803,687 units, a 7.2 percent decrease compared to 2024. Meanwhile, dealers sold 833,712 units to consumers, which was a 6.3 percent decrease compared to 2024.
Read: EVs Prop up Indonesia's Net Zero Emissions Goal in Manufacturing Industry
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