Indonesia is said to be planning more tax incentives to attract global electric-vehicle producers, seeking to bolster its allure for top producers including Tesla Inc. and BYD Co.
The cabinet has agreed to offer 0% export duty and value-added tax exemption to electric carmakers that would set up onshore, according to people familiar with the matter, who asked not to be named as the policy hasn’t been announced. It is unclear how long the incentives would be offered for, and whether there would be other conditions attached to them.
Potential investors can import cars to sell locally, but they must complete a factory within two years or face penalties that are still being formulated by the government, the people said. The cabinet’s decision needs to be formalized and the policy may still change before it’s announced.
President Joko Widodo is raising the stakes in the race to secure a slice of the global EV supply chain. Indonesia is competing against neighbors Vietnam, the Philippines and Thailand, which is a regional automotive powerhouse.
Indonesia has been in talks with Tesla for years to get the US carmaker to set up onshore, while top EV producer BYD signed an agreement to explore investment opportunities in May with no actual deal announced so far.
