Govt Relaxes Domestic Content Level of EV to Woo Foreign Investment

By Editorial Team 14/08/2023
electric vehicle concept
Summary

The government plans to ease the Domestic Component Level (TKDN) regulations for electric car manufacturers.

Industry Minister Agus Gumiwang Kartasasmita announced that the initial 40 percent TKDN requirement, which was scheduled to be implemented in 2024, has now been pushed back to 2026. "We are introducing this relaxation to attract potential investors," Agus said as he inaugurated the 2023 GAIKINDO Indonesia International Auto Show (GIIAS) on Thursday.

Under this relaxation, Agus explained that the government will focus solely on achieving a 60 percent TKDN after 2026. Currently, the battery segment is the largest contributor to the TKDN in electric vehicle components.

Agus noted that batteries make up around 40 to 50 percent of the overall composition of electric car parts. Additionally, he highlighted that once Indonesia initiates electric car production, TKDN value potentially surges beyond the 50 percent mark.

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