Indonesia's government reports that investment in the electric vehicle (EV) sector has reached around 15.5%, with nearly 90% of planned investments already realised, indicating strong investor interest and a high level of industry readiness.

A senior government official stated that EV investment is a key pillar of Indonesia's national industrial self-reliance strategy.

National EV manufacturing capacity has expanded significantly, while domestic EV sales have increased, accounting for around 12.9% of total vehicle sales.

The total number of EVs in operation nationwide has risen substantially, reflecting progress in infrastructure development and supply chain expansion.

It was also highlighted that advances across the full EV value chain, from mining and smelting through to battery production, have been supported by continued policy backing and capital inflows.

The government aims to leverage the EV sector to drive economic growth and position Indonesia as a global hub for automotive manufacturing and innovation.

EV figures dominated by two-wheelers

While overall EV manufacturing capacity has expanded, this headline figure masks the composition of production.

Electric car manufacturing capacity remains significantly lower than that of electric two- and three-wheelers.

Claims that EVs account for 12.9% of total vehicle sales also overstate progress when assessed against official passenger vehicle data.

Official figures indicate that electric cars represented 6.25% of total passenger vehicle sales in 2024, up from 2.12% in 2023 and 1.3% in 2022.

Government targets remain well ahead of current adoption levels, with ambitions to significantly increase the number of electric cars and electric motorcycles on the road by 2030.

Subsidy-led growth faces sustainability challenges

Investment momentum continues to track financial incentives more closely than underlying consumer demand.

Value-added tax incentives that reduced EV purchase prices ended in December 2025, with policy expected to shift towards production mandates and other non-financial measures rather than broad consumer subsidies.

This transition could dampen demand and place pressure on EV manufacturers, battery producers, and investors.

Environmental concerns also remain, given Indonesia's coal-heavy electricity mix.

Estimates indicate that EV battery production is associated with substantial carbon dioxide emissions, while total EV manufacturing emissions per vehicle also remain significant.

These factors could complicate Indonesia's ambition to become a global EV hub as international partners increasingly prioritise low-carbon supply chains.