As Indonesia accelerates its journey with electric vehicles, we are witnessing a major shift in both environmental stewardship and market dynamics. Consequently, in order to empower the future of transportation in Indonesia, the Government of Indonesia has recently promulgated latest regulations regarding Battery-Powered Electric Vehicles ("BEVs") such as MoF Reg. 38/2023 and MoI Reg. 6/2023. Strategically advancing towards a sustainable future, these regulations tackle environmental concerns while also pave the way for novel business opportunities. Find out more our insights about this topic in our Legal Brief publication.

1. Legal Brief
Acceleration of the Usage of
Battery-Powered Electric Vehicle
for Road Transportation

2. BACKGROUND
Underlying Reasons for The High Demand in Motorized Vehicles Fuel
Islands 2018 2019 2020 2021 2022
Annual
Increase (%)
Sumatera 26 176 464 27 465 696 27 950 772 29 228 153 30 591 196 3,97
Jawa 76 041 434 80 373 138 81 888 918 85 038 851 88 626 935 3,90
Bali – Nusa
Tenggara
6 633 611 7 032 233 7 154 443 7 630 745 7 627 141 3,55
Kalimantan 9 057 520 9 609 750 9 804 754 10 359 009 10 880 521 4,69
Sulawesi 7 347 639 7 818 165 7 976 576 8 556 744 8 991 456 5,18
Papua –
Maluku
Islands
1 252 108 1 318 030 1361 988 1 449 071 1 554 568 5,39
Total 126 508 776 133 617 012 136 137 451 141 992 573 148 261 817 4,05
Number of Motor Vehicles by Islands (2018-2022)
Source: Central Bureau of Statistics, “Land Transportation Statistic”, Vol. 8, 2023
"I am confident that this is the right moment to usher in a new era of pollution-free
transportation, a new era for industry and downstream activities, and a new era for the
supporting ecosystem of Battery-Powered Electric Vehicle (“BEV”). Especially if we utilize
domestically produced batteries."
Source: Antaranews.com
Luhut Binsar Pandjaitan – Coordinating Minister of Maritime Affairs and Investment
From 2018 to 2022, Indonesia saw an increase on the
use of motorized vehicles at the rate of 4,05%
annually, which inevitably caused the rise in demand
and consumption of fossil fuel, amounting to
approximately 12 million kiloliters of fuel in the span of 4
(four) years.
Correspondingly, according to the Ministry of
Environment and Forestry, the emission of motorized
vehicle using fossil fuel contributed to up to as
86,8% of total air pollution in 2019.
Therefore, the Government has formulated a strategy
to tackle this issue, which focuses on the utilization of
clean energy in the transportation sector, which includes:
(i) the use of BEVs and electric powered mass
transportation; and (ii) the development of science,
technology, and innovation to develop BEVs, including
lithium battery and fast charging system.
Source: National Medium Term Development Plan (Rencana
Pembangunan Jangka Menengah Nasional) 2020-2024.
Source: Ministry of Energy Mineral and Resources
A H R P L e g a l B r i e f

3. Types of BEV Domestic Component Level for BEVs
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Year 2026 and so forth
Year 2024-2025
Year 2019-2023
Year 2026 and so forth
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Year 2030 and so forth
Year 2024-2029
Year 2022-2023
Year 2019-2021
TKDN Minimum Percentage
Art. 8 PR 55/2019
The Domestic Component Level or Tingkat Komponen Dalam Negeri (“TKDN”) is the measure of
domestic content in goods, services, as well as the combination of goods and services.
Art. 1 (12) PR 55/2019
Two and/or
Three Wheels
Four and/or
More Wheels
EV Battery-Powered Vehicles
BEVs are vehicles powered by an electric motor and receives its electrical energy supply
directly from a battery located either within the vehicle or externally.
Art. 1 (3) PR 55/2019
An electric motor is an electromechanical device that consumes electrical energy to
generate mechanical energy as a source of propulsion.
A battery, or an electric energy storage medium, is an electrical power source utilized to
supply electrical energy to the electric motor.
2
Art. 1 (1) & (2) PR 55/2019
1
A H R P L e g a l B r i e f
Definition and Types of Battery-Powered
Electric Vehicles
TKDN Minimum Percentage
TKDN Minimum Percentage

4. Framework for the Acceleration of BEV Industry
BEV Industry Industry of the BEV Components
Industrial companies have the obligation to build domestic BEVs
manufacturing facilities
The activity can be done
independently or through
collaborative production with
other industrial companies.
Established under the laws
and regulations of Indonesian
Possesses Industrial Business
License or Izin Usaha Industri
(“IUI”) to assemble and
produce BEVs
Activities
conducted by
Art. 5 jo. Art. 6 jo. Art. 9 jo. Art. 10 PR 55/2019
BEV Industry and/or Industry of
the BEVs components must
provide guarantee and after
sales service. (Art. 30 PR
55/2019)
BEV Industry
Established under the laws and
regulations of Indonesian
Possesses the relevant IUI to
assemble and produce the
primary and/or supporting
components for BEVs
Industrial Companies
Steps Taken by the Government
Assistance for the Purchase of Two-Wheeled BEVs
The Government offers support for the
motorcycle conversion program,
transforming combustion engine
motorcycles into electric ones. This
assistance covers up to 200,000 units,
distributed as 50,000 units in 2023 and
150,000 units in 2024. The program is
overseen by the Ministry of Energy and
Mineral Resources of the Republic of
Indonesia.
Preamble of Joint Decision of MoEMR, MoT, and
Chief of the Indonesian National Police Number
204.K/EK.01/MEM.E/2023, PJ.850, KB/1/VII/2023 of
2023
Motorcycle Conversion Program
Who qualifies to become the beneficiary?
The assistance program is provided for a single purchase of two-wheeled BEVs made
by individuals with the same citizen identification number. The individuals must meet
the following criteria:
a. Indonesian citizens;
b. at least 17 (seventeen) years of age; and
c. possess an electronic identity card.
How does it work?
The Government pays reimbursement for a discount on the purchase of two-wheeled
BEVs by the public to the industrial company. The discount is provided at the rate of
Rp7,000,000.00 (seven million Rupiah) for the purchase of 1 (one) unit of two-
wheeled BEVs.
Art. 3 MoI Reg. 6/2023
A H R P L e g a l B r i e f
ACCELERATION OF DOMESTIC INDUSTRY

5. Providers of the Incentives
The incentives of the acceleration of Battery-Powered Electric
Vehicle for land transportation are provided by: (i) the Central
Government; or (ii) the Local Government.
Art. 17 (1) PR No. 55/2019
Types of Incentives
1. import duty incentives on importation for: (i) BEVs in completely
knocked down condition; (ii) BEVs in incompletely known down
condition; or (iii) primary component for certain amount and
duration;
2. sales tax incentives on luxury goods;
3. exemption or reduction of central taxes (pajak pusat);
4. exemption or reduction of local taxes;
5. incentives for import duties on the import of machinery, goods,
and materials for the purpose of capital investment;
6. incentives for equipment manufacturing public electric vehicle
charging stations and public electric vehicle battery swap
stations;
7. incentives for export financing;
8. fiscal incentives for research, development, and technological
and vocational innovation activities on BEVs;
9. parking rates at locations determined by the Local Government;
10. reduction in electricity charging fees at public electric vehicle
charging stations;
11. financial support for public electric vehicle charging stations
infrastructure development;
12. professional competency certifications for human resources in
BEVs industry;
13. product certification and/or technical standards for BEV industrial
companies and BEVs component industry; and
14. providing programs for the procurement and conversion support
for two-wheeled BEVs.
Art. 19 (1) and (2) PR No. 55/2019
Fiscal
1. exemption from certain road use restrictions;
2. delegating production rights to related technology on BEVs,
whose patent are licensed, has been held by the Central
Government and/or Local Government; and
3. security development and/or safeguarding operational activities in
the industrial sector, ensuring continuity or smoothness of
logistics and/or production activities for industrial company on
certain objects which are vital national objects.
Art. 20 (1) PR 55/2019
Non-Fiscal
Recipients of the Incentives
1. industrial companies, higher education institutions, and/or
research and development institutions that conduct
technology research, development, and innovation, as
well as vocational institutions;
2. industrial companies prioritizing prototype usage and/or
components from other industrial companies, technology
research, and development institutions, as well as
vocational institutions focusing on BEVs technology;
3. industrial companies that meet domestic components
standards and produce domestic BEVs;
4. industrial companies manufacturing components for
BEVs;
5. industrial companies producing national brands of BEVs;
6. companies offering battery swap services (penyewaan
baterai) for electric motorcycles.
7. industrial companies accelerating production and
preparing facilities and infrastructure for the use of BEVs;
8. companies involved in recycling within the battery waste
industry;
9. companies providing public electric vehicle charging
stations and public electric vehicle battery swap stations,
and/or institutions or housing that use private electricity
installations to recharge BEVs;
10. public transportation systems based on BEVs.
11. individuals using BEVs.
12. BEV industrial companies that procure completely built-up
(dalam keadaan utuh) imports.
13. BEV industrial companies that can expedite the domestic
assembly process within the importation period,
completing it by the end of 2025.
Art. 17 (3), Art. 18 (1), dan (2) PR 55/2019
Special Case
Industrial company that manufactures national brand of BEVs
will be given:
a. fiscal incentives as provided under Article 19 (1) and (2)
PR 55/2019;
b. non-fiscal incentives as provided under Article 20 (1) PR
55/2019; and
c. additional fiscal and non-fiscal incentives.
Art. 21 PR 55/2019
A H R P L e g a l B r i e f
INCENTIVES AWARD MECHANISM

6. consisting of:
1. Electrical power
equipment;
2. Current, voltage, and
communication control
system; and
3. Protection and
security system.
Provision of Charging and Battery Exchange Facilities
Charging
Facilities
Private Electrical Installation
Public EV Charging Station/Stasiun Pengisian
Kendaraan Listrik Umum (”SPKLU”)
Where?
For sale, in:
1. Central Government and Local Government
offices; and
2. Residential or housing properties.
For personal use and not for sale, can be
located anywhere.
Where?
1. Public gasoline station;
2. Compressed natural gas station;
3. Central Government and Local Government
offices;
4. Shopping places; and
5. Public parking by the roadside.
By Who?
Public EV Charging Station Businesses, who
are either:
1. Holders of IUPTL who owns business
area(s); or
2. Holders of IUPTL who owns a business area
by collaborating with state-owned enterprises
in the energy sector or other business
entities.
By Who?
Owners of Private Electrical Installation, do
not need to possess Business License for
Electricity Provision or Izin Usaha Penyediaan
Tenaga Listrik (“IUPTL”).
Battery
Exchange
Public EV Battery Exchange Station/Stasiun
Penukaran Baterai Kendaraan Listrik Umum
(“SPBKLU”)
Where?
1. Public gasoline station;
2. Compressed natural gas station;
3. Central Government offices and Local
Government offices;
4. Shopping places; and
5. Public parking by the roadside.
By Who?
SPBKLU Business Entities, which does not
require IUPTL.
Art. 22 jo. Art. 23 jo. Art. 24 jo.
Art. 26 PR 55/2019 jo. Art. 7 (2)
jo. Art. 11 MoEMR Reg. 13/2020
Art. 26 PR 55/2019 jo. Art. 19
MoEMR Reg. 1/2023
A H R P L e g a l B r i e f
INFRASTRUCTURE PROVISION

7. Prior requirements to conduct type test are first obtain:
1. Mark of the registration type specifically for imported
vehicles; and
2. NIK registration for vehicles made and/or assembled
domestically.
Technical Provisions for Battery-Powered Electric Motor Vehicles
Registration of Type and Identification
Number for Battery-Powered Electric
Vehicles
Art. 28 (1) and (2) PR No. 55/2019
Every BEVs that are imported, manufactured,
and/or assembled domestically will operated on
the road, the type must be registered and meet
the Vehicle Identity Number/Nomor Induk
Kendaraan (“NIK”) requirements.
Conducting
Type Test
Battery-
Powered
Electric
Vehicles
Technical and Roadworthy Requirements
Art. 29 PR No. 55/2019
Every BEV operated on the road must meet
technical and roadworthy requirements.
Conducting
a Test on
Battery-
Powered
Electric
Vehicles
Type Test for Battery-Powered Electric Vehicles,
conducted by government Type Test implementing unit
Provides testing facilities and equipment as well as competent
testing staff.
Periodic Test for Battery-Powered Electric Vehicles
Competent authority:
1. testing implementation unit owns by the district/municipal
government;
2. Trademark implementing unit that has received permission
from the organizing minister government affairs in the field
of traffic and road transportation facilities and
infrastructure; and
3. Private testing implementation unit that has permission
from the administering minister government affairs in the
field of traffic and road transportation facilities and
infrastructure.
Mandatory registration for
every battery-powered
electric vehicles.
Identification, Classification and
Registration of Battery-Powered
Electric Vehicles
Art. 28 (1) and (2) PR No. 55/2019
Conducting a Test on Battery-Powered
Electric Vehicles, in the form of:
1. vehicle frame identification; and
2. classification of each Electric Motor in the
motorized vehicle used according to
engineering specifications.
Battery-Powered Electric Motor Vehicles Type Testing is a test conducted
on the physical aspects of BEVs or a study on the design and engineering of
BEVs before it is manufactured and/or assembled and/or imported on a mass
scale, as well as modified BEVs.
Periodic Testing of Battery-Powered Electric Motor
Vehicles is the testing of electric motor vehicles conducted
periodically on each BEVs that is operated on the road.
Art. 1 (7) PR No. 55/2019
Art. 1 (6) PR No. 55/2019
A H R P L e g a l B r i e f
Technical Provision Compliance

8. Value Added Tax (VAT)
Incentives for BEV
The Imposition of VAT
The VAT incurred on the sale of
specific Four-Wheeled BEVs to
buyers will be covered by the
Government for the fiscal year 2023.
Requirements for VAT Exemption
The Four-Wheeled BEVs must have
a minimum Domestic Component
Level of 40% (forty percent) to
qualify for the VAT exemption.
Amount of VAT Discount
The amount of VAT discount borne by the
Government on the sale of Four-Wheeled
Battery-Powered Electric Vehicles is 10% (ten
percent) of the regular VAT rate of 11% (eleven
percent). Consequently, the VAT payable by the
public is reduced to only 1% (one percent).
BEVs with a Domestic Component Level (TKDN)
equal to or above 20% (twenty percent) but
below 40% (forty percent) will receive a 5% (five
percent) VAT discount. Therefore, the VAT
payable by the public amounts to 6% (six
percent).
Art. 2 (1) MoF Reg. 38/2023
Art. 3 (2) MoF Reg. 38/2023
Art. 4 (1) MoF Reg. 38/2023
Art. 4 (2) MoF Reg. 38/2023
VAT Subsidy Applicability
The VAT subsidy program by the
Government is applicable only for the
tax period from April 2023 to
December 2023.
Art. 2 (1) MoF Reg. 38/2023
Types and Models of BEV
The models and types of vehicles that
meet the TKDN criteria are further
determined through Minister of
Industry Decree No. 1641/2023.
Luxury Goods Sales Tax Incentives
for Battery-Powered Electric Vehicle
Imposition of Luxury Goods Sales Tax/Pajak
Penjualan atas Barang Mewah (“PPnBM”) rate of
15% (fifteen percent) based on 20% (twenty
percent) of the sales price for electric passenger
cars (which less than 10 (ten) occupants
including the driver), using battery or other
electric storage media. Art. 12 GR 73/2019
Pertains to electric double cabin vehicles, which
applies a 10% (ten percent) PPnBM rate.
Art. 24 GR 73/2019
Imposition of PPnBM rate of 15% (fifteen
percent) based on a 20% (twenty percent) of the
sales price for four-wheel energy-efficient and
affordable vehicles.
Art. 25 GR 73/2019
Imposition of PPnBM rate of 15% (fifteen
percent) but the taxable base varies (40% and 46
2/3% of the sales price) which covers four-wheel
vehicles using full hybrid technology.
Art. 26 & 27 GR 73/2019
A H R P L e g a l B r i e f
Tax Incentives for Battery-Powered
Electric Vehicle

9. Protection Against the Environment
Specific Treatment of Battery Waste
Battery waste treatment from BEVs must be carried out by recycling
and/or management, conducted by:
1. institution or industry in the BEVs sector; and/or
2. domestic BEVs industry component industry that has a permit for
battery waste management from licensed BEVs in accordance
with the provision laws and regulations in the field of waste
management.
Art. 32 (1) and (2) PR No. 55/2019
The Government will provide appreciation for those conduct the
recycling and/or managing the battery waste from BEVs.
Government Facilities for the Purchase of
BEVs Two-Wheeled Motor Vehicles
Limitations on the Provision of Assistance Program
The assistance program is provided for a one-time purchase of BEVs
Two-Wheeled Motor Vehicles by individuals with the same National
Identification Number.
The individuals referred to in this context must be at least: (i)
Indonesian citizens; (ii) aged at least 17 (seventeen) years; and (iii)
possess an electronic ID card (e-KTP).
Art. 3 (2) & (2) MoI Reg. 6/2023
Price Discount Assistance
The Government will reimburse the discount amount on the purchase
of BEVs Two-Wheeled Motor Vehicles by individuals to the industrial
company. The discount is valued at IDR 7,000,000 for the purchase of
1 (one) unit of BEVs Two-Wheeled Motor Vehicle.
Art. 3 (2) & (2) MoI Reg. 6/2023
The assistance program is allocated with a quota of: (i) a maximum of 200,000
units for the fiscal year 2023, and (ii) a maximum of 600,000 units for the fiscal
year 2024.
Art. 4 (2) MoI Reg. 6/2023
Requirements for the Assistance Program
To be eligible for the price discount, such BEVs Two-Wheeled Motor
Vehicles must be registered in the information system and meet the
minimum TKDN requirement of 40% (forty percent).
Art. 5 (2) MoI Reg. 6/2023
Calculation of Domestic Component Level
Shall also notes the implementation of the National Roadmap for
BEVs Industry Development, which lay out a strategic plan for the
development of the BEVs industry (including coordination with
government bodies, industries, educational institutions, and research
organizations.
Art. 4 & 5 MoI Reg. 6/2022
Specifically, the TKDN calculation is based on several aspects as
follows:
1. Manufacture Aspect for Primary Components: calculated as
50% for 2020-2029, 60% from 2030 onwards of the overall TKDN
value.
2. Manufacture Aspect for Supporting Components: accounted
for 10% of the overall TKDN value.
3. Assembly Aspect: for 2020-2029, it shall contribute 30%, and
from 2030 onwards it shall contribute 20% of the overall TKDN
value.
4. Development Aspect: consistently accounts for 10% of the
TKDN value.
*these aspects collectively determine the TKDN percentage, emphasizing the
development and integration of local components in the manufacturing of BEVs.
Art. 7 & 8 MoI Reg. 6/2022
Detailed Specifications and Testing Protocols
of BEV Vehicle
Technical Requirements
These set specific criteria for batteries (i.e., capacity, durability, and
safety mechanisms), electrical systems (i.e., circuit integrity, insulation
and connectors), and vehicle construction (structural stability, material
quality and environmental impact considerations).
Testing and Certification
The protocols involve comprehensive testing of BEVs, including
battery life cycle assessments, electrical safety checks (like short
circuits and overcharge protection costs), and overall vehicle
performance tests (incl. roadworthiness, braking efficiency, and
environmental emissions).
Art. 7 - 9 MoT Reg. 87/2020
A H R P L e g a l B r i e f
Things to Note for BEV Buyer and Supplier

10. We will continue to follow the developments on this topic and provide additional information as it
becomes available. If you have any questions on this topic, please contact:
Thea Mutiara Khalifa
thea@ahrplaw.com
Cut Hasri Nabila
nabila@ahrplaw.com
Hanif Julianto Firman
hanif@ahrplaw.com
This publication has been prepared by AHRP for educational and informational purposes only. The information contained in this publication is not
intended and should not be construed as legal advice. Due to the rapidly changing nature of law, AHRP makes no warranty or guarantee
concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it
applies to your circumstances before deciding to take any action.
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