Who wouldn't be happy if they could buy an electric car at a lower price? Well, in 2025, you can get a VAT incentive of 10% for several domestically produced electric car models with a minimum Domestic Component Level (TKDN) 40% Minimum. That way the VAT burden paid by consumers is 2 percent, after the application of the 12 percent VAT which is planned to take full effect on February 1, 2025. 

“In 2025, domestic electric cars with a minimum Domestic Component Level (TKDN) of 40 percent will get an incentive in the form of a 10 percent reduction in VAT, so consumers only need to pay VAT of 2 percent,” explained Rustam Effendi, Associate Expert Policy Analyst from the Ministry of Finance's Fiscal Policy Agency.

Well, this is a great opportunity for those of you who want to switch to environmentally friendly vehicles at a lower cost. This incentive certainly has a positive impact on the electric vehicle market in Indonesia, both in terms of more affordable prices and increasing the adoption of electric cars in the community.

What is the VAT Incentive for Electric Cars?

This VAT incentive is a government policy to reduce the price of electric cars, which are more expensive than conventional vehicles. This program aims to accelerate the transition to more environmentally friendly electric cars and support the local automotive industry in developing electric cars.

With this VAT incentive, you can buy an electric car at a more affordable price. This means that the cost of owning an eco-friendly vehicle will be lower, without having to worry about expensive taxes. Of course, this is a big boost for people who want to switch to electric cars but are constrained by price.

Why Electric Cars Need VAT Incentives?

Electric cars are still considered an expensive long-term investment. In Indonesia, although electric cars are gaining popularity, the selling price is still relatively high when compared to fossil fuel cars. The government through this VAT incentive seeks to lower the cost barrier and provide an opportunity for more people to switch to environmentally friendly vehicles.

The impact of this VAT incentive will be felt directly by consumers. For example, if the price of an electric car is Rp500 million, with a 10% VAT incentive, you only need to pay around Rp450 million. This clearly reduces the cost burden that needs to be incurred when buying an electric car, and certainly provides a greater opportunity for people to choose environmentally friendly vehicles.

How Does the VAT Incentive Process Work?

The VAT reduction process will take effect immediately upon the purchase of a qualifying new electric car. The car must be produced in Indonesia with local components that reach a minimum TKDN of 40%. This means that only electric cars that are assembled in Indonesia and meet these criteria will receive the tax incentive. This also supports the domestic automotive industry to be more developed.

However, keep in mind that this VAT incentive only applies to the purchase of new cars, not used cars. Therefore, if you are planning to buy a used electric car, unfortunately you will not get the incentive.

After talking about the policy and benefits of VAT incentives, here are some electric cars that you can choose and get a VAT rebate in 2025. Some of the car options that get this incentive include:

Hyundai Ioniq 5 – TKDN: 40%

  • Signature (Long Range, Standard Range)
  • Prime (Long Range, Standard Range)

Wuling Air . – TKDN: 40,04%

  • 230R 30KW200LV1
  • 230R 30KW200LV2

Wuling Binguo EV –TKDN: 47,55%

  • E260R 50KW333LV11D
  • E260R 50KW333LV1X1D
  • E260R 50kW410LV1X1D

Chery Omoda E5 –TKDN: 40,5%

Wuling CloudEV –TKDN: 40%

  • EQ100 100KW460LV2X1D
  • EQ100R 100KW460LV2X1D
  • EQ100R 100KW460LV2YID
  • EQ100R 100KW505LV2YID

MG 4 EV –TKDN – 40%

  • MG 4 EV LUX

MG ZS EV – TKDN: 40%

  • MG ZS EV LUX

Neta V-II –TKDN: 44%

  • V-II Lite
  • V-II Smart

Neta X –TKDN: 44%

  • X 400 Elite
  • X 400 Supreme
  • X 500 Elite
  • X 500 Supreme

Hyundai New Kona –TKDN: 40% (80% untuk Style dan N Line)

  • Signature EXN
  • Signature
  • Prime EXN
  • Prime
  • New Kona Style
  • New Kona N Line

Wuling BinguoEV – TKDN: 40%

  • E260R 50ZW333LV1X1D
  • E260R 50ZW333LV1Y1D
  • E260R 50ZW410LV1X1D
  • E260R 50ZW410LV1Y1D
  • E260R 50ZW333LV11D

Chery iCar 03 – TKDN: 40%

  • Luxury Long Range
  • Premium Long Range