Jakarta, CNBC Indonesia – The development of electric cars in Indonesia continues to grow, especially after the government provided many incentives to this industry. However, it is not easy to develop this industry in the future because it encounters a number of challenges.
“There are still many obstacles and challenges to developing the electric vehicle industry in Indonesia, such as the processing of battery technology which requires sophisticated technology and considerable costs, as well as the limited battery infrastructure for electric vehicles,” said Johanna Gani, CEO of Grant Thornton Indonesia, Thursday (7/7). 9/23).
One of the additional incentives that the government is likely to provide in the future is subsidies for hybrid vehicles or Hybrid Electric Vehicles (HEV). Currently, the government has only provided subsidies for Battery Electric Vehicle (BEV)-based cars, in the form of a value added tax (VAT) discount of 10%.
One of the reasons for pushing incentives for Hybrids is because currently the sales conditions for HEVs are currently higher than for BEVs. The reason is simple, people don’t need to worry about charging the battery when carrying HEVs over long distances. Meanwhile, if using a BEV, consumers must consider battery power and charging infrastructure in the middle of a trip.
If using a BEV, consumers must consider battery power and charging infrastructure in the middle of a trip. The existence of incentives for hybrid electric cars will have a more positive impact on sales and further strengthen the government’s support for electrified vehicles.
Therefore, it is necessary to have support from all parties, both the government and the people of Indonesia in order to accelerate electric-based vehicles (EV), which are not only in the form of infrastructure, but also regulation and production. The public must also continue to be educated about the positive impact of energy transition policies in the context of reducing emissions, one of which is by switching to using electric vehicles.
“The government should also increase support, through regulations and other supporting incentives, which can attract investors to invest and also price subsidies that can attract people to switch to electric vehicles,” said Johanna.
This year the Government launched the Acceleration Program for Battery-Based Electric Motorized Vehicles (KBLBB) in the form of Government assistance and fiscal incentives such as a tax holiday of up to 20 years to strengthen the KBLBB ecosystem, VAT exemption on imports and the acquisition of capital goods in the form of machinery and factory equipment for the motor vehicle industry to incentives taxation with PPnBM 0%. In addition, PLN also plans to provide discounted electricity rates for electric car owners.
As a result, electric car sales have soared, based on a report from the Association of Indonesian Automotive Industries (Gaikindo), electric car sales in Indonesia totaled 15,437 units throughout 2022. The number shot up 383.5% compared to the previous year which amounted to 3,193 units.
Recently, indications of the growth of electric cars in the country were clearly seen at the largest car exhibition in Indonesia, namely GIIAS 2023. The event became the location for various car brands to launch their line-ups of electric cars or electric vehicles (EV).
The sales results also recorded good achievement figures, there were even electric car models that were able to contribute 50% to the total sales of one brand during the GIIAS event. This figure is an indication that Indonesia is heading towards net zero emission.
“Various countries in the world have set a target of achieving net zero emissions by 2050, in accordance with the Paris agreement which limits the increase in global air temperature to a maximum of 1.5°C, so that the world can avoid the effects of global warming. One of them is by building an electric vehicle ecosystem,” she said.
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