In an effort to revive the national automotive market, which has been under pressure in recent years, the government is ramping up its support for eco-friendly vehicles by providing incentives not only for electric and hybrid cars, but also including the commercial vehicle segment into its list of recipients.

The ministry plans to offer both fiscal and non-fiscal incentives to accelerate the development and production of environmentally friendly commercial vehicles, positioning them within the broader framework of green mobility.

“Indonesia is committed not only to being a market but also a key global player in the supply chain of eco-friendly commercial vehicles. In fact, we've accelerated the net-zero emissions (NZE) target for the manufacturing sector by 10 years to 2050, ahead of the national timeline,” Minister of Industry Agus Gumiwang Kartasasmita said as quoted in a statement on Wednesday, June 11, 2025.

He also asked automotive businesses to boost the local content value (TKDN) in every stage of production, including sourcing raw materials and components. A higher TKDN score opens up more opportunities for companies to participate in government procurement and benefit from various fiscal incentives.

“Increasing TKDN through enhanced local value and supply can significantly improve a company's competitiveness, both in domestic and export markets,” the minister said.

The Ministry of Industry has long supported the growth of Indonesia’s automotive sector, particularly through incentives for electric and hybrid vehicles. More recently, it has been working on TKDN reform aimed at creating a more investment-friendly environment, making it easier for businesses to operate in the country.

The government is also introducing new strategies to safeguard investors from various challenges, including revising regulations that may hinder manufacturers’ growth.

Additionally, the requirement for TKDN in government fleet vehicles has been eased. This move is intended to level the playing field for manufacturers committed to investing in Indonesia, enabling them to compete more fairly.