The Indonesian government has set a target for electric vehicles to meet a Domestic Content Level (TKDN) of 60% from 2027.

The policy requires manufacturers to increase the use of locally produced components. It is also intended to increase domestic participation in the electric vehicle supply chain beyond vehicle assembly.

Zheng Shuo, President Director of Chery Group Indonesia, said the company was preparing to comply with the regulation, including by producing and using locally manufactured batteries.

"To meet the 60% TKDN target, one of the measures we will take is to produce batteries locally in Indonesia. This will allow the TKDN, which was previously only 40%, to reach at least 60%," Zheng Shuo said in Wuhu, China, recently.

Local battery production

According to Zheng Shuo, Chery Group currently has two local battery suppliers whose products will be used in its electrified vehicles.

"The names cannot be announced yet. The company has identified two suppliers and will use them to comply with the government's regulation requiring a TKDN of 60% by 2027," he said.

Regulations

The government has set a minimum Domestic Content Level (TKDN) requirement of 60% for battery-based electric vehicles (KBLBB) for the 2027-2029 period. The requirement is intended to increase the use of locally produced components in vehicles manufactured in Indonesia.

The provisions refer to Presidential Regulation Number 79 of 2023 and Minister of Industry Regulation Number 6 of 2022. Under this regulatory framework, the minimum TKDN requirement for electric vehicles increases in stages.

For electric vehicles with four or more wheels, the minimum TKDN requirement is 40% for the 2022-2026 period. It increases to 60% for 2027-2029 and to 80% from 2030.

TKDN is calculated using government-established methods that assess components and production processes in accordance with applicable regulations. The calculation is not based solely on the number of Indonesian-made components installed in a vehicle. Therefore, assembling a vehicle in Indonesia does not automatically mean that it meets the minimum TKDN requirement.

Manufacturers must account for component origins and work with local suppliers to meet domestic content requirements. The policy covers the local production of batteries and other electric vehicle components, alongside vehicle assembly.