Indonesia's Tax Incentives for Nickel-Based EV Batteries

#Indonesia Weighs Tax Incentives to Promote #Nickel-Based EV Batteries

Posted on August 7, 2025 by Nanthakumar Victor Emmanuel, P.Eng Leave a comment

A black electric vehicle parked on a highway with a city skyline in the background, featuring a prominent 'Ni' label on the vehicle and the Indonesian flag in the corner.

Jakarta. The Finance Ministry is reviewing a plan to offer tax incentives aimed at encouraging electric vehicle (EV) manufacturers to adopt nickel-based batteries over lithium alternatives, to accelerate the country’s downstream nickel industry and solidify its role in the global EV supply chain.

The proposal is currently being assessed by the Fiscal Policy Agency (BKF) through the Directorate General of Economic and Fiscal Strategy (DJSEF). Riznaldi Akbar, a senior policy analyst at the directorate, said the incentives could include government-borne value-added tax (VAT), import duty exemptions, and luxury goods sales tax (PPnBM) relief.

“It’s still under review at BKF,” Riznaldi said on Thursday. “The package would likely combine various tax incentives–VAT subsidies, import duty waivers, and PPnBM exemptions– not only for EV purchases but also for battery components.”