Hyundai Urges Policy Consistency as Jakarta Weighs EV Tax Exemption Future

JAKARTA, Investortrust.id — The honeymoon period for Indonesia’s electric vehicle (EV) sector is facing a sudden reality check. Hyundai Motors Indonesia (HMID), a key pillar of the country's EV manufacturing strategy, is demanding "policy certainty" after a series of conflicting regulations threatened to strip away long-standing tax exemptions.

For global automakers like Hyundai, the appeal of Indonesia lies in a predictable, subsidy-heavy "Roadmap" designed by the central government. However, when local tax authorities begin viewing EVs as a revenue stream rather than a green tool, that roadmap fractures. If regional taxes are fully implemented, the total cost of ownership for an EV in Jakarta could skyrocket, negating the efficiency gains that make these vehicles attractive to the growing middle class.

Hyundai’s Call for Consistency

Fransiscus Soerjopranoto, Chief Operating Officer of HMID, is keeping a close eye on the fallout. While the Ministry of Home Affairs (Mendagri) recently issued a circular (SE) urging governors to waive taxes, the move was a damage-control response to an earlier regulation (Permendagri 11/2026) that had quietly removed the "0% tax" status for EVs.

"Hyundai respects every government policy aimed at strengthening the automotive ecosystem," Soerjopranoto said on April 25, 2026. However, he warned that the market impact of these "stop-and-start" incentives will only be clear in the coming months. "Our hope is that future policies remain synchronized with the long-term industrial development roadmap," he added, emphasizing that investment hinges on trust.

.

The Jakarta Dilemma: Fairness vs. Sustainability

The battleground for this policy shift is Jakarta. The city’s Revenue Agency (Bapenda) is currently caught between the central government's green goals and the localized need for "fiscal fairness." Lusiana Herawati, Head of Bapenda DKI Jakarta, noted that her office is studying how to balance EV incentives with the high costs of maintaining the city’s public transport network.

"The discourse on imposing taxes is based on the consideration of fairness on the ground, specifically the provision and maintenance of public transportation infrastructure in Jakarta," Lusiana explained on Friday. While Jakarta has not yet begun collecting these taxes, the mere possibility of an added fiscal burden is already rattling prospective buyers who are weighing the Rp 400 million to Rp 700 million ($25,150–$44,000) price tag of most EVs.

.

The Demand Gap Crisis

The economic stakes are high. Andry Satrio Nugroho, a lead economist at the Institute for Development of Economics and Finance (Indef), points out that the vast majority of Indonesian car buyers seek vehicles priced under Rp 200 juta ($12,500). With EVs still sitting at luxury price points, any increase in regional taxes could be a death blow to mass adoption.

"From our research, if these regional tax rules are implemented, the operational costs of an electric car could increase twofold," Nugroho warned. He argued that these "mixed signals" directly contradict President Prabowo Subianto’s push for EVs as a National Strategic Project (PSN). Without a unified front on taxes, Indonesia risks missing its 2030 de-carbonization goals and losing out to regional competitors in the global EV supply chain.