Industry Minister Airlangga Hartarto symbolically receives electric car key from car maker Mitsubishi (Image credit : Industry Ministry)

JAKARTA (TheInsiderStories) – The Government is drafting a regulation that will slash the luxury goods sales tax and import duty of electric car, as an attempt to stimulate the development in Indonesia. The move is also part of the Government’s drive to reduce emissions from vehicle sector.

Industry Minister Airlangga Hartarto said Government to slash the luxury tax to 0 per cent and import duty to 5.0 per cent and its expect will be finalized within one month. Indonesia is still far behind in the development of the electric cars. Industry players have blamed lack of infrastructure support, such as charging points or stations, which discouraged car makers to produce electric cars.

Some industry players also demand the government to provide incentives in order to lure car makers to produce electric cars. Such incentives are needed to encourage car makers to produce electric cars and catch up with other countries.

Globally, China has taken the lead in developing electric cars. Goldman Sachs has said that China is expected to supply 60 per cent of the world’s electric vehicles by 2030, up from 45 per cent in 2016.

Minister Hartarto admitted that Indonesia needs time to prepare regulatory framework, infrastructure support and technology development.

He said the plan to develop electric car has already been included in the country’s national vehicle industry roadmap. The government needs to look at the readiness of electric cars component producers, such as battery and power control unit, before issuing new regulations.

Hartarto said the government targets that by 2025, around 20 per cent of cars produced in Indonesia will be low carbon emission vehicles, including electric cars.

Global carmakers such as Nissan and Mitsubishi Motors have rolled out their electric cars for the mass market in 2010. But the electric vehicle revolution failed to materialize and much of their investments went sour.

Nearly a decade later, China and other governments are driving a massive push for a future of electric cars as they try to shift consumers away from combustion engines.

To capture the market for these vehicles, global carmakers from Volkswagen to Tesla are attempting to lock in supplies of raw materials that are needed to increase production of lithium-ion batteries, which will power this electric revolution.

The hand-over of Mitsubishi prototype electric cars on Monday could signal the company’s interest to develop the electric car for the mass market in Indonesia.

Decree

President Joko Widodo in January this year said that the government will soon sign a presidential decree that will pave the way for the development of the electric car in the country. Director General for Electricity at the Energy and Mineral Resources Ministry (MEMR) Andy N. Sommeng said all related ministries have agreed on the electric car plan.

He said the decree will spell out the roles of related ministries including the energy, industry and trade ministries as well as others over the electric car initiative. The move aims to boost the use of green energy utilization in Indonesia and reduce gas emissions.

MEMR Ignatius Jonan has stated that it is time for Indonesians to use electric cars as it is more practical and environmentally friendly compared to oil-fueled cars.

Many developed countries are starting to leave the sale of hydrocarbon-fueled cars and switch to electricity. The Government of Britain and France have even made bold steps to prohibit non-electric vehicle sales for highways starting 2040. 

Email: roffie.kurniawan@theinsiderstories.com