Prabowo Demands Total EV Transition as Indonesia Pivots Roadmap to Scale Up Local Industry

JAKARTA, Investortrust.id — President Prabowo Subianto has delivered a renewed declaration of intent for Indonesia’s energy transition, demanding that all ground transportation across the nation switch to electric power.

Speaking at the inauguration of the renovated Semarang Tawang Station in Central Java on Thursday, July 30, 2026, President Prabowo emphasized that replacing internal combustion engines with electric power across public rail, heavy freight, buses, cars, and motorbikes is essential to building a green, renewable energy economy.

Prabowo's push comes at a critical juncture for Southeast Asia's largest economy, which remains heavily dependent on volatile foreign fuel imports that repeatedly strain state subsidy budgets whenever global oil prices surge. Transitioning to a fully electrified fleet provides a double dividend: it shields public coffers from global commodity shocks while building a domestic manufacturing ecosystem designed to capture more value from Indonesia's vast mineral resources.

A Phased Roadmap to Electrification

Behind the president's ambitious vision lies a structured national framework. Under Presidential Regulation No. 79/2023, the Ministry of Industry divided Indonesia's EV transition into three core phases:

Under the national roadmap established by Presidential Regulation No. 79/2023, Indonesia's transition to electric mobility is structured across three distinct operational phases designed to build an end-to-end industrial ecosystem. The initial Introduction and Piloting phase, spanning from 2023 through 2026, focused on introducing electric vehicle technology, constructing essential charging infrastructure, and granting completely built-up (CBU) import permissions tied to explicit commitments for local manufacturing investments.

The nation is now entering the Ecosystem Strengthening phase from 2026 to 2029. During this transition period, state policy pivots toward reinforcing the domestic supply chain, adjusting regional tax incentive structures, and strictly enforcing a minimum local content requirement (TKDN) of over 60% for all vehicles assembled within the country.

Looking ahead to the post-2030 Industry Maturity phase, the government aims to achieve complete industrial self-reliance. In this final stage, local content mandates will rise to 80%—mirroring the maturity of conventional combustion engine manufacturing—while scaling up the operating population to millions of battery-powered two-wheelers and passenger vehicles nationwide to meet long-term national emission targets.

Pivoting Fiscal Strategy: From Blank-Check Subsidies to Local Content

To match this roadmap, Indonesia's fiscal stance is evolving from blanket consumer incentives to targeted support for domestic manufacturing.

Under updated regulations through Ministry of Home Affairs Regulation No. 11 of 2026, blanket regional tax exemptions have ended. EVs are now subject to Motor Vehicle Tax (PKB) and Vehicle Ownership Transfer Fees (BBNKB), calculated using formulas based on vehicle sale value and environmental impact coefficients.

Concurrently, central government initiatives—such as the 100% and 40% Government-Borne Value-Added Tax (PPN DTP) subsidies—concluded at the end of 2025. Central fiscal support and subsidies are now being redirected selectively toward national EV initiatives and manufacturers producing vehicles domestically.

Foreign Players Align with National Vision

Vietnamese electric vehicle maker VinFast exemplifies how foreign auto manufacturers are buying into Indonesia’s long-term electrification blueprint.

Having entered the market with its compact VF 3 model, VinFast is accelerating its presence in the second half of 2026 by rolling out its VF 7 SUV. The automaker is expanding its local footprint to more than 190 dealerships, investing in domestic assembly facilities, and establishing charging infrastructure through its V-GREEN network.

"Based on Gaikindo reports, the industry grew around 14%. We see our growth outpacing the market and we expect to grow even further in the second half," Antonio "Toti" Zara, CEO of VinFast Southeast Asia, stated at the Gaikindo Indonesia International Auto Show (GIIAS) on Thursday, July 30, 2026.