Finance Minister Signals Caution on Renewed Electric Vehicle Incentives for 2026

JAKARTA, Investortrust.id — Finance Minister Purbaya Yudhi Sadewa indicated on Wednesday that the Indonesian government is taking a wait-and-see approach regarding the future of electric vehicle (EV) subsidies, noting that his ministry has yet to receive a formal proposal for 2026 incentives. The statement comes as current tax breaks for imported battery electric vehicles (BEVs) are set to expire on December 31, 2025.

While the Ministry of Industry has hinted at the necessity of continued support for the national automotive sector, Minister Purbaya emphasized that any extension would be subject to a rigorous impact study. The government plans to evaluate how previous subsidies influenced actual sales figures, industrial growth, and job creation before committing further state funds.

"I haven't received the final proposal from the Ministry, at least not until now," Mr. Purbaya told reporters at the Attorney General's Office complex.

Economic Growth vs. Subsidies

The Finance Minister suggested that the recent rebound in automotive sales may be driven more by a broader economic recovery and strengthening consumer purchasing power than by government handouts. After a sluggish performance in the first ten months of 2025 caused by a cooling economy, Mr. Purbaya noted that purchasing power has only recently begun to climb.

The administration is currently targeting an aggressive economic growth rate of 6%, a figure the Minister believes will naturally boost car sales without heavy reliance on fiscal intervention. "The recovery in motor vehicle purchases over the last few months did not arise solely because of incentives," Mr. Purbaya stated. "It arose because economic conditions have started to improve."

The Looming 2025 Deadline

The lack of a concrete plan for 2026 creates a period of uncertainty for the EV industry. Industry officials have expressed concern that without a regulatory extension, the momentum for EV adoption could stall. Currently, incentives are governed by Investment Ministerial Regulation No. 6 of 2023 and No. 1 of 2024, both of which are scheduled to sunset at year-end.

The domestic automotive market is witnessing a pivotal industrial shift. Wholesale delivery data from late 2025 indicates that for the first time, Electric Vehicle (EV) sales have eclipsed the Low Cost Green Car (LCGC) segment, long the backbone of the entry-level market. By November 2025, electric car wholesale volumes reached 143,505 units, officially surpassing the LCGC volume of 130,643 units.

While the rise in EVs signals growing consumer confidence and the impact of government incentives, Minister Purbaya's comment pointed to that further subsidies for 2026 are still under evaluation. The government aims to determine if this growth is sustainable through organic purchasing power rather than continued fiscal intervention.

Mahardi Tunggul Wicaksono, a director at the Ministry of Industry, confirmed that inter-agency meetings to discuss the continuity of these regulations have not yet occurred. As of now, the industry is operating under the assumption that the BEV import incentives will conclude as scheduled on December 31.