Erfan Maruf, Jakarta – Electric cars assembled overseas could meet Indonesia's 60% local-content requirement if they use batteries manufactured entirely in the country, a senior Industry Ministry official said Tuesday, highlighting the growing importance of domestic battery production in the electric vehicle industry.
Setia Diarta, the ministry's director general for metal, machinery, transportation equipment and electronics industries, said government simulations showed that locally manufactured batteries could contribute enough domestic value to meet the threshold, even when the vehicles themselves are assembled abroad.
"Based on our simulations, when manufacturers use batteries produced in Indonesia, the 60% domestic-content requirement can actually be achieved. This means manufacturers could meet the requirement regardless of whether they have a vehicle assembly plant in Indonesia," Setia said in Jakarta.
He cited the hypothetical example of an electric car brand that continues to assemble vehicles overseas but uses batteries manufactured in Indonesia.
The findings suggest that manufacturers could potentially meet Indonesia's localization requirements through their supply chains without necessarily relocating vehicle assembly operations to the country.
Setia said the development of Indonesia's domestic battery industry was creating new opportunities for electric vehicle manufacturers to increase the local content of their products.
He stressed that compliance with domestic-content requirements depends not only on where vehicles are assembled but also on the origin and value of their components.
Local content requirement to rise in 2027
Indonesia plans to raise the minimum domestic-content requirement for electric vehicles to 60% in 2027, up from the current 40%, under Presidential Regulation No. 79 of 2023.
The requirement is scheduled to increase further to 80% starting in 2030 as the government seeks to deepen domestic manufacturing and expand the electric vehicle supply chain.
The domestic-content requirement, known locally as Tingkat Komponen Dalam Negeri (TKDN), measures the proportion of a product's value attributable to domestic production under the government's applicable calculation rules.
Setia's remarks indicate that domestically produced batteries could become a major factor in determining whether electric vehicle models qualify under the higher threshold.
However, actual compliance would still depend on the applicable calculation methodology and certification process for each vehicle model.
Previously, Industry Ministry official Patia Monangdo, who heads the ministry's battery electric vehicle industry working team, said the average domestic-content level for electric cars in Indonesia stood at approximately 45% – 47%.
Some models had already achieved domestic-content levels as high as 80%, he said.
More than 100 electric vehicle products have also obtained domestic-content certification in Indonesia, reflecting the industry's progress in incorporating locally produced components.