What Electric Vehicle Acceleration Program Exists Under PERPRES 55/2019?

1.0 Introduction and Regulatory Context

On August 8, 2019, President Joko Widodo signed Presidential Regulation (Peraturan Presiden/PERPRES) Number 55 of 2019 concerning the Acceleration of Battery Electric Vehicle Programs for Road Transportation (Percepatan Program Kendaraan Bermotor Listrik Berbasis Baterai untuk Transportasi Jalan). This regulation was subsequently promulgated on August 12, 2019, marking Indonesia's formal entry into comprehensive electric vehicle policy development. The regulation establishes Indonesia's first integrated framework for transitioning from conventional internal combustion engine vehicles to battery-powered electric transportation systems.

PERPRES 55/2019 represents a strategic policy response to multiple national priorities: reducing dependence on imported fossil fuels, decreasing urban air pollution, developing domestic automotive manufacturing capabilities, and positioning Indonesia as a regional hub for electric vehicle production. The regulation's comprehensive scope addresses the entire battery electric vehicle ecosystem, from manufacturing standards and local content requirements to charging infrastructure deployment and consumer incentives. This holistic approach distinguishes Indonesia's EV policy from fragmentary incentive programs implemented in neighboring countries.

The regulation has been amended once through PERPRES 79/2023, which adjusted certain local content (TKDN) requirements and timeline provisions to reflect market realities and manufacturing capacity constraints. However, the core framework established in 2019 remains intact. The regulation consists of nine chapters and 37 articles, creating binding obligations for government agencies, state-owned enterprises, private manufacturers, and infrastructure developers. Understanding this regulatory architecture is essential for any entity participating in Indonesia's emerging electric vehicle sector.

The implementation of PERPRES 55/2019 occurs within a broader policy ecosystem that includes Presidential Instruction (INPRES) 7/2022 on battery electric vehicle use for government fleets, Ministry of Energy and Mineral Resources Regulation 1/2023 on charging infrastructure, and Ministry of Industry regulations on domestic content level specifications. These implementing regulations create a layered governance structure where presidential directives establish strategic direction while ministerial regulations provide technical implementation guidance. This article examines the foundational framework established by PERPRES 55/2019.

2.0 Key Definitions and Scope

Article 1 of PERPRES 55/2019 establishes critical definitions that determine the regulation's application scope. Understanding these definitions is essential because they establish which vehicles qualify for incentives, what infrastructure counts as compliant charging stations, and how local content calculations are performed. The regulation defines 13 core terms, of which several are particularly significant for practical implementation.

2.1 Verbatim Indonesian Definitions (Pasal 1)

The regulation provides the following key definitions in Article 1:

"Dalam Peraturan Presiden ini yang dimaksud dengan:

1. Motor Listrik adalah peralatan elektromekanik yang mengonsumsi tenaga listrik untuk menghasilkan energi mekanik sebagai penggerak."

Translation: Electric Motor is electromechanical equipment that consumes electrical energy to produce mechanical energy as a propulsion system.

"3. Kendaraan Bermotor Listrik Berbasis Baterai (Battery Electric Vehicle) yang selanjutnya disebut KBL Berbasis Baterai adalah kendaraan yang digerakan dengan Motor Listrik dan mendapatkan pasokan sumber daya tenaga listrik dari Baterai secara langsung di kendaraan maupun dari luar."

Translation: Battery-Based Electric Motor Vehicle (Battery Electric Vehicle), hereinafter referred to as Battery-Based KBL, is a vehicle propelled by an Electric Motor and obtaining electrical energy supply from Batteries either directly in the vehicle or from outside.

This definition is critically important because it establishes that the regulation applies to pure battery electric vehicles, not hybrid vehicles with internal combustion engine components. The phrase "secara langsung di kendaraan maupun dari luar" (either directly in the vehicle or from outside) clarifies that both vehicles with fixed batteries and those with swappable battery systems qualify under the regulation. This flexibility accommodates different business models, including battery-as-a-service arrangements common in two-wheeled electric vehicles.

TKDN Definition:

The regulation also defines Tingkat Komponen Dalam Negeri (TKDN) as "besaran kandungan dalam negeri pada Barang, Jasa, serta gabungan Barang dan Jasa" (the quantity of domestic content in Goods, Services, and combined Goods and Services). This definition becomes operationally significant in Articles 6-8 where specific TKDN percentage requirements are established. The TKDN calculation methodology is further detailed in Ministry of Industry regulations implementing this presidential directive.

2.2 Vehicle Classification (Pasal 2)

Article 2 classifies battery electric vehicles into distinct categories based on wheel configuration:

a. KBL Berbasis Baterai beroda dua dan/atau roda tiga (Battery-based BEVs with two and/or three wheels)

b. KBL Berbasis Baterai beroda empat atau lebih (Battery-based BEVs with four or more wheels)

This classification system is legally significant because different TKDN requirements, incentive structures, and technical standards apply to each category. Two and three-wheeled vehicles face different local content timelines than four-wheeled vehicles, reflecting the distinct manufacturing ecosystems and market maturity levels for motorcycles versus automobiles. The regulation references Law Number 22 of 2009 concerning Road Traffic and Transportation for additional vehicle classification criteria.

2.3 Infrastructure Definitions

The regulation defines "Stasiun Pengisian Kendaraan Listrik Umum (SPKLU)" as public electric vehicle charging stations. These are distinguished from private charging facilities, with SPKLU subject to specific tariff regulation, technical standards, and public access requirements. The classification between public and private charging infrastructure creates different regulatory obligations for developers and operators, particularly regarding electricity tariff structures managed by PLN (the state electricity company) and technical specifications overseen by the Ministry of Energy and Mineral Resources.

3.0 Core Requirements and Provisions

The operational framework of PERPRES 55/2019 consists of five strategic pillars that collectively create the battery electric vehicle acceleration program. Article 3 establishes these pillars as mandatory components of the program's implementation strategy.

3.1 Five Strategic Pillars (Pasal 3)

Article 3 states that the acceleration of battery-based BEV programs for road transportation is implemented through:

"Percepatan Program KBL Berbasis Baterai untuk transportasi jalan diselenggarakan melalui:

a. percepatan pengembangan industri KBL Berbasis Baterai dalam negeri;

b. pemberian insentif;

c. penyediaan infrastruktur pengisian listrik dan pengaturan tarif tenaga listrik untuk KBL Berbasis Baterai;

d. pemenuhan terhadap ketentuan teknis KBL Berbasis Baterai; dan

e. perlindungan terhadap lingkungan hidup."

Translation: The acceleration of the Battery-Based BEV Program for road transportation is implemented through: (a) acceleration of domestic Battery-Based BEV industry development; (b) provision of incentives; (c) provision of electric charging infrastructure and regulation of electricity tariffs for Battery-Based BEVs; (d) fulfillment of technical requirements for Battery-Based BEVs; and (e) environmental protection.

Each of these five pillars receives detailed elaboration in subsequent chapters of the regulation. The order is deliberate: industrial development precedes incentives because manufacturing capacity must exist before consumption can be incentivized. Infrastructure provision is paired with tariff regulation because charging station deployment is economically unviable without appropriate electricity pricing structures. Technical requirements ensure safety and interoperability, while environmental protection provisions mandate end-of-life battery management and recycling protocols.

3.2 Matrix 1: Strategic Implementation Framework

This matrix demonstrates the multi-agency coordination required for program implementation. No single ministry controls all aspects of the BEV ecosystem. The Ministry of Industry focuses on manufacturing capacity, the Ministry of Finance manages fiscal incentives, the Ministry of Energy oversees charging infrastructure, the Ministry of Transportation sets vehicle standards, and the Ministry of Environment ensures ecological sustainability. This distribution of responsibilities necessitates the coordination mechanism established in Article 34 (discussed in Section 4.0).

3.3 Matrix 2: Local Content (TKDN) Requirements by Vehicle Type and Timeline

Article 8 establishes progressive local content requirements that increase over time, creating escalating pressure for manufacturers to localize production. The original PERPRES 55/2019 timelines were subsequently modified by PERPRES 79/2023, but both sets of requirements demonstrate the regulatory philosophy of gradual domestic capability building.

The TKDN calculation methodology, detailed in Ministry of Industry Regulation 6/2022, uses a complex formula that weights different components based on their value addition. Battery systems represent approximately 35-40% of total vehicle value, meaning achieving 80% TKDN without domestic battery cell production is mathematically impossible. This creates strong pressure for battery manufacturing investment.

Manufacturers failing to meet TKDN requirements face three primary consequences: (1) ineligibility for fiscal and non-fiscal incentives under Articles 17-21, (2) prohibition on using "Made in Indonesia" designations in marketing and export documentation, and (3) potential import license restrictions for CKD and IKD (incompletely knocked-down) components. These enforcement mechanisms make TKDN compliance commercially essential rather than merely aspirational.

3.4 Import and Manufacturing Modalities

The regulation permits three manufacturing modalities, each with different TKDN implications:

CBU (Completely Built-Up Units): Fully assembled vehicles imported from foreign manufacturing facilities. These vehicles qualify for ZERO TKDN credit and receive no incentive benefits under the regulation. CBU imports are permitted but economically discouraged through full import duties and luxury sales taxes.

CKD (Completely Knocked-Down): Components imported in disassembled form and assembled in Indonesia. TKDN percentage depends on which components are locally sourced versus imported. A CKD facility using entirely imported components but performing assembly in Indonesia might achieve 10-15% TKDN through labor value-addition alone.

IKD (Incompletely Knocked-Down): Hybrid approach where some sub-assemblies arrive pre-assembled (e.g., imported battery pack and motor) while other components (chassis, body, interior) are either locally manufactured or assembled from CKD components. This modality offers flexibility for manufacturers who lack domestic battery supply chains but can localize vehicle integration.

The regulation does not explicitly prohibit CBU imports, but the incentive structure effectively makes them commercially unviable for mass-market vehicles. CBU imports may continue for ultra-luxury electric vehicles where price sensitivity is low and production volumes do not justify local assembly investment.

4.0 Implementation Framework

The implementation architecture of PERPRES 55/2019 relies on three mechanisms: institutional coordination through an inter-ministerial team, fiscal and non-fiscal incentive delivery, and infrastructure deployment through state-owned enterprises.

4.1 Coordination Team Structure (Pasal 34)

Article 34 establishes a Coordination Team (Tim Koordinasi) responsible for accelerating the battery electric vehicle program implementation. This institutional mechanism addresses the inherent coordination challenges of a program spanning multiple ministries with different sectoral mandates.

The Coordination Team is chaired by ministers responsible for maritime and investment affairs (Menteri yang menyelenggarakan urusan pemerintahan di bidang kemaritiman dan investasi), with participation from:

• Minister of Finance (Menteri Keuangan)
• Minister of Industry (Menteri Perindustrian)
• Minister of Energy and Mineral Resources (Menteri Energi dan Sumber Daya Mineral)
• Minister of Transportation (Menteri Perhubungan)
• Minister of Environment and Forestry (Menteri Lingkungan Hidup dan Kehutanan)
• Chief of National Police (Kepala Kepolisian Negara Republik Indonesia)

The inclusion of the National Police Chief reflects the regulatory authority over vehicle registration and traffic enforcement, as police-administered vehicle registration systems must be updated to accommodate BEV-specific technical documentation and charging infrastructure location databases for emergency response planning.

The Coordination Team's mandate includes: (1) synchronizing regulations across ministries to eliminate conflicting requirements, (2) resolving inter-agency disputes over jurisdiction and resource allocation, (3) monitoring TKDN compliance and incentive distribution, (4) recommending regulatory adjustments based on implementation experience, and (5) reporting implementation progress to the President. This structure creates accountability directly to the presidential level, elevating BEV policy above typical inter-ministerial coordination mechanisms.

4.2 Matrix 3: Incentive Framework Structure (Pasal 17-21)

Chapter III of the regulation (Articles 17-21) establishes a comprehensive incentive framework designed to address both supply-side barriers (manufacturing costs) and demand-side barriers (consumer purchase prices). The incentive structure distinguishes between manufacturers, researchers/developers, and end-users.

This incentive architecture creates a deliberate progression: manufacturers receive import duty relief and tax holidays to establish production capacity, then end-users receive purchase tax reductions once domestic manufacturing achieves minimum scale, and finally ongoing operational subsidies (charging tariffs, reduced annual vehicle taxes) maintain long-term BEV ownership advantages over conventional vehicles.

The incentive system is explicitly performance-based rather than universal. Higher TKDN percentages unlock greater incentive levels, creating competitive pressure among manufacturers to accelerate localization. A BEV with 35% TKDN receives minimal PPnBM reduction, while a vehicle with 60% TKDN might qualify for complete PPnBM elimination. This graduated structure aligns private commercial incentives with national industrial policy objectives.

4.3 Infrastructure Deployment Mechanism (Pasal 22-27)

Chapter IV (Articles 22-27) addresses charging infrastructure provision, recognizing that consumer BEV adoption is impossible without accessible charging networks. The regulation employs a hybrid public-private deployment model.

Initial Public Deployment Mandate: Article 22 assigns PT PLN (Persero), the state electricity company, as the primary entity responsible for initial SPKLU deployment. This recognizes that early-stage charging infrastructure is economically unviable for private investors due to low utilization rates when few BEVs are on roads. PLN is authorized to construct and operate SPKLU facilities, with capital costs potentially recovered through regulated electricity tariffs or direct government subsidies.

Public-Private Partnership Framework: PLN may enter partnerships with other state-owned enterprises (BUMN) or private entities to accelerate deployment. This opens charging infrastructure to private investment once network effects create commercial viability. Private SPKLU operators must obtain business licenses from the Ministry of Energy and Mineral Resources and comply with technical interoperability standards ensuring all BEVs can charge at all SPKLU facilities regardless of manufacturer.

Technical and Safety Standards: Articles 24-26 mandate compliance with national standards (SNI - Standar Nasional Indonesia) for charging interface types, communication protocols, safety systems (ground fault protection, overcurrent protection, thermal management), and payment systems. The Ministry of Energy works with the National Standardization Agency (BSN) to adopt international standards (such as IEC 61851 for AC charging and CHAdeMO/CCS for DC fast charging) while allowing flexibility for emerging technologies.

Electricity Tariff Regulation: Article 27 grants authority to the Minister of Energy and Mineral Resources to establish preferential electricity tariffs for BEV charging. This addresses the economic challenge that commercial electricity tariffs would make BEV operation costs comparable to gasoline vehicles, eliminating the economic incentive for adoption. Subsidized charging tariffs, potentially cross-subsidized by other electricity consumer categories, create operational cost advantages that offset higher BEV purchase prices.

The infrastructure provisions recognize a critical sequencing challenge: consumers will not purchase BEVs without charging infrastructure, but private investors will not build charging infrastructure without existing BEV fleets generating revenue. The regulation resolves this "chicken-and-egg" problem by mandating initial public sector deployment (PLN) to create baseline infrastructure coverage, after which private investment can sustain network expansion.

5.0 Practical Implications and Implementation Challenges

The implementation of PERPRES 55/2019 creates significant opportunities and challenges for multiple stakeholder categories: automotive manufacturers, component suppliers, infrastructure developers, government agencies, and consumers.

5.1 Matrix 4: Stakeholder Compliance Obligations and Strategic Responses

5.2 Manufacturing Sector Transformation Requirements

For Indonesia's existing automotive manufacturing sector, dominated by internal combustion engine vehicle production for companies like Toyota, Honda, Mitsubishi, and Suzuki, PERPRES 55/2019 creates profound transformation pressure. The TKDN requirements cannot be met through minor modifications to existing factories; they require fundamental restructuring of supply chains and production processes.

Supply Chain Development Imperatives: Achieving 80% TKDN by 2030 requires developing domestic suppliers for components that currently do not exist in Indonesia's automotive supply base. This includes:

• Battery Cells: Indonesia has substantial nickel reserves (critical battery input) but limited battery-grade nickel refining capacity and zero lithium-ion battery cell production. Achieving TKDN targets requires attracting at least 2-3 gigafactory investments producing 20-50 GWh annually.
• Electric Motors and Power Electronics: While Indonesia has electric motor production capability for industrial applications, high-efficiency permanent magnet motors for BEVs require different materials (rare earth magnets) and manufacturing precision. Power electronics (inverters, DC-DC converters, onboard chargers) are not currently produced domestically.
• Battery Management Systems (BMS): Sophisticated electronic systems monitoring cell voltages, temperatures, and state-of-charge require embedded software and sensor technologies not present in Indonesia's current automotive supply chain.
• Thermal Management Systems: BEV battery and power electronics require active liquid cooling systems more complex than conventional vehicle radiators. These components are not currently manufactured in Indonesia.

Investment Capital Requirements: Industry analysis suggests achieving 80% TKDN across Indonesia's projected 2030 BEV production volume (estimated 400,000-600,000 units annually) requires USD 8-12 billion in manufacturing infrastructure investment across the entire supply chain. This includes battery cell production (USD 3-5 billion), motor and power electronics manufacturing (USD 1-2 billion), vehicle assembly facility conversions (USD 500 million - 1 billion), and component supplier development (USD 2-3 billion). These capital requirements far exceed the organic investment capacity of Indonesia's existing automotive sector, necessitating foreign direct investment attraction.

Technology Transfer Mechanisms: The regulation implicitly requires technology transfer from global BEV leaders (primarily Chinese manufacturers like BYD, Great Wall Motors, and Wuling, who currently dominate Indonesia's early BEV market) to Indonesian entities. However, PERPRES 55/2019 provides limited enforcement mechanisms for technology transfer beyond TKDN percentage requirements. Manufacturers can technically meet TKDN through wholly-owned foreign subsidiaries operating in Indonesia without transferring intellectual property to Indonesian companies. This limitation may reduce the regulation's effectiveness in creating indigenous BEV technological capabilities.

5.3 Infrastructure Deployment Challenges and Grid Implications

The charging infrastructure provisions create significant challenges for Indonesia's electricity system, particularly PLN's distribution network in urban areas where BEV concentration will be highest.

Grid Capacity Constraints: Widespread DC fast charging (50-350 kW per charger) places unprecedented peak demand on distribution transformers designed for conventional residential and commercial loads. A single DC fast charging station with 4-6 charging points requires 500-1,000 kW capacity, equivalent to a small factory. Deploying thousands of SPKLU facilities in Jakarta, Surabaya, Bandung, and other major cities requires substantial distribution grid upgrades costing tens of billions of Rupiah per city.

Electricity Supply and Renewable Energy Integration: If BEV charging is supplied primarily by coal-fired power generation (currently 60%+ of Indonesia's grid mix), the environmental benefits of BEV adoption are significantly reduced. The regulation's Article 3(e) on environmental protection implicitly requires integrating BEV charging with renewable energy expansion, but PERPRES 55/2019 provides no binding mechanisms for ensuring charging infrastructure uses renewable electricity. This represents a critical implementation gap requiring additional regulatory development.

Urban Deployment Challenges: Deploying SPKLU in dense urban areas faces land availability constraints. Optimal charging locations (shopping centers, office buildings, apartment complexes) require negotiations with private property owners and may face resistance from tenants concerned about parking space allocation. The regulation provides no eminent domain authority or mandatory SPKLU hosting requirements for private properties, limiting deployment speed in areas where BEV adoption will be highest.

Interoperability and Payment Systems: Indonesia's fragmented digital payment ecosystem creates challenges for standardized SPKLU payment systems. Different operators may accept different payment methods (bank cards, e-wallets, RFID cards, mobile apps), creating user friction. The regulation mandates technical interoperability for charging protocols but does not address payment system standardization, potentially fragmenting the user experience.

5.4 Consumer Adoption Barriers and Incentive Effectiveness

Despite the comprehensive incentive framework in Articles 17-21, consumer BEV adoption in Indonesia faces structural barriers that fiscal incentives alone cannot overcome.

Total Cost of Ownership Analysis: While PPnBM reductions lower purchase prices, BEVs remain 20-40% more expensive than equivalent conventional vehicles even after incentives. For a mid-sized sedan, this represents IDR 100-150 million price premium. This premium can only be recovered through lower operational costs (electricity versus gasoline) over 5-10 years of ownership, a calculation that assumes stable electricity tariff subsidies and adequate charging infrastructure availability. Many consumers use shorter ownership time horizons (3-5 years before resale), making BEV economics unfavorable.

Range and Charging Time Constraints: Most affordable BEVs available in Indonesia offer 250-400 km range, adequate for urban daily use but insufficient for intercity travel without charging stops. DC fast charging requires 30-60 minutes for 80% charge, compared to 3-5 minutes for gasoline refueling. For consumers who regularly travel between cities (Jakarta-Bandung, Jakarta-Semarang, Surabaya-Malang), current BEV range and charging infrastructure makes long-distance travel impractical.

Model Availability and Consumer Preferences: Indonesia's automotive market is dominated by MPVs (multi-purpose vehicles like Toyota Avanza, Mitsubishi Xpander) and SUVs preferred for family use and Indonesian road conditions. Most BEVs currently available are sedans and hatchbacks, creating a mismatch between BEV supply and consumer vehicle type preferences. Until BEV manufacturers offer affordable electric MPVs and SUVs, market penetration will remain limited to urban professionals willing to accept sedan/hatchback form factors.

Secondary Market Uncertainty: BEV resale values are uncertain due to battery degradation concerns and rapid technology obsolescence. Consumers purchasing BEVs face risk that vehicles may lose value faster than conventional vehicles, and potential buyers in secondary markets may discount prices heavily due to battery replacement costs. This uncertainty increases the perceived risk of BEV purchase, particularly for middle-income consumers for whom vehicle purchase represents a major financial commitment.

5.5 Environmental Outcomes and Battery Lifecycle Management

Article 3(e)'s environmental protection provision creates obligations for end-of-life battery management, but PERPRES 55/2019 provides limited operational detail on implementation mechanisms.

Battery Recycling Infrastructure: Lithium-ion battery recycling requires specialized facilities with capabilities for safe discharge, disassembly, and chemical processing to recover lithium, nickel, cobalt, and manganese. Indonesia currently has no commercial-scale battery recycling facilities. As BEVs reach end-of-life (8-12 years), spent battery packs will accumulate, creating environmental hazards if not properly managed. The regulation identifies this risk but does not mandate specific recycling infrastructure development timelines or assign financial responsibility for recycling costs.

Extended Producer Responsibility: International best practice for battery lifecycle management employs extended producer responsibility (EPR) frameworks where manufacturers finance battery collection and recycling through fees embedded in initial vehicle prices. PERPRES 55/2019 does not explicitly establish EPR mechanisms, creating uncertainty about who bears recycling costs and potential regulatory gaps that could result in informal battery disposal with environmental contamination risks.

Second-Life Battery Applications: BEV batteries typically retain 70-80% capacity after automotive use, making them suitable for stationary energy storage applications (grid stabilization, renewable energy storage, backup power). The regulation does not address second-life battery applications, potentially missing opportunities to extend battery useful life and improve overall environmental outcomes. Explicit regulatory frameworks encouraging second-life applications could create economic value from used batteries while delaying end-of-life disposal.

Net Environmental Impact Assessment: The ultimate environmental benefit of BEV adoption depends on the carbon intensity of electricity generation, battery production environmental impacts, and end-of-life management effectiveness. If BEVs are charged primarily with coal-fired electricity, lifecycle greenhouse gas emissions may be comparable to efficient conventional vehicles. PERPRES 55/2019 does not establish metrics for assessing net environmental outcomes or require periodic evaluation of whether BEV acceleration is achieving environmental objectives. This analytical gap limits evidence-based policy adjustment.

5.6 Implementation Monitoring and Regulatory Evolution

PERPRES 55/2019 establishes ambitious goals but provides limited mechanisms for implementation monitoring, performance evaluation, and regulatory adaptation based on outcomes.

TKDN Verification Mechanisms: Ensuring manufacturers accurately calculate and report TKDN percentages requires robust verification systems. The Ministry of Industry must develop auditing capabilities to verify component sourcing documentation, conduct factory inspections to confirm domestic manufacturing claims, and maintain databases of approved local suppliers. The regulation grants this authority but does not specify verification methodologies, creating potential for inconsistent enforcement across manufacturers and opportunities for TKDN calculation manipulation.

Incentive Effectiveness Evaluation: The regulation does not mandate periodic evaluation of whether incentives are achieving intended outcomes (BEV adoption rates, manufacturing investment, TKDN increases) at reasonable fiscal cost. Without systematic evaluation, Indonesia risks continuing expensive incentive programs that may be inefficient compared to alternative policy instruments.

International Competitiveness Considerations: Indonesia's BEV policy operates in a regional context where Thailand, Vietnam, and Malaysia are simultaneously implementing BEV incentive programs and competing for the same foreign manufacturing investment. PERPRES 55/2019's TKDN requirements may disadvantage Indonesia compared to countries with less stringent local content mandates, potentially deterring investment. Regular benchmarking against regional competitors and willingness to adjust TKDN timelines (as demonstrated by PERPRES 79/2023) is essential for maintaining investment attractiveness.

Coordination with Trade Agreements: Indonesia's participation in regional trade agreements (ASEAN Economic Community, Regional Comprehensive Economic Partnership) creates obligations regarding discriminatory treatment of imported goods and local content requirements. The TKDN provisions in PERPRES 55/2019 may face challenges under trade agreements as potential violations of national treatment principles. The regulation does not address trade agreement compliance, creating legal uncertainty that could result in disputes with trading partners.

5.7 Future Regulatory Development Requirements

Full implementation of PERPRES 55/2019's vision requires supplementary regulations addressing gaps in the current framework:

Battery Safety and Standards Regulations: Detailed technical regulations on battery safety testing, thermal runaway prevention, crash safety, and fire suppression are needed. These should reference international standards (UN ECE R100, SAE J2464) while allowing flexibility for emerging technologies.

Charging Infrastructure Interoperability Standards: Mandatory technical specifications ensuring all BEVs can charge at all SPKLU facilities regardless of manufacturer, including physical connector standards, communication protocols (ISO 15118), and payment system interoperability.

Grid Integration and Demand Management: Regulations enabling time-of-use electricity tariffs that incentivize off-peak charging, vehicle-to-grid (V2G) applications where BEVs provide grid services, and aggregated charging management to prevent grid overload.

Battery Lifecycle Management: Extended producer responsibility frameworks, battery passport systems tracking battery composition and recycling content, and mandatory recycling infrastructure development timelines.

Consumer Protection: Regulations addressing BEV-specific consumer protection issues including battery degradation warranties, charging infrastructure availability guarantees, and resale value transparency.

Government Fleet Conversion Plans: Detailed implementation regulations for INPRES 7/2022 specifying which government vehicle categories must convert to BEVs on what timelines, with budget allocation mechanisms to finance procurement.

These regulatory developments would transform PERPRES 55/2019 from a high-level framework into an actionable implementation system with clear obligations, enforcement mechanisms, and accountability.

Conclusion

PERPRES 55/2019 establishes Indonesia's most comprehensive framework for electric vehicle adoption, creating a strategic architecture spanning industrial development, fiscal incentives, infrastructure deployment, technical standards, and environmental protection. The regulation recognizes that successful BEV transition requires simultaneous progress across the entire ecosystem rather than isolated interventions targeting only manufacturers or consumers.

The regulation's progressive TKDN requirements demonstrate sophisticated industrial policy linking market access to domestic value creation. By establishing graduated local content thresholds increasing from 35-40% initially to 80% by 2030, the regulation creates incentives for manufacturers to invest in domestic supply chain development while allowing time for Indonesian suppliers to develop necessary capabilities. The 2023 amendment extending certain TKDN timelines demonstrates regulatory pragmatism, adjusting requirements to reflect market realities while maintaining long-term localization objectives.

The multi-agency coordination mechanism established in Article 34 addresses the inherent complexity of BEV policy spanning multiple ministerial jurisdictions. By creating accountability directly to the presidential level, the regulation elevates BEV transition above routine inter-ministerial coordination, signaling political commitment to implementation. The comprehensive incentive framework combining fiscal instruments (tax reductions, import duty relief) with non-fiscal benefits (licensing priority, charging tariff subsidies) creates multiple reinforcing motivations for BEV adoption and manufacturing investment.

However, implementation challenges remain substantial. Achieving 80% TKDN requires USD 8-12 billion in manufacturing infrastructure investment, far exceeding Indonesia's organic automotive sector capacity. Charging infrastructure deployment faces grid capacity constraints requiring billions in distribution system upgrades. Consumer adoption barriers including higher purchase prices, limited model availability, and range constraints persist despite incentives. Environmental benefits depend critically on electricity supply decarbonization and battery recycling infrastructure that remain underdeveloped. These challenges require sustained regulatory development, implementation coordination, and resource commitment beyond what PERPRES 55/2019 alone provides.

The regulation's ultimate success depends on factors partially beyond regulatory control: global BEV technology cost trajectories, battery material prices, foreign investment decisions, and consumer acceptance rates. What PERPRES 55/2019 provides is a coherent strategic framework aligning regulatory interventions with market dynamics to accelerate transitions that market forces alone would produce too slowly to meet climate commitments and air quality objectives. As Indonesia continues implementation, periodic evaluation and regulatory adaptation based on outcomes will be essential for maintaining policy effectiveness while avoiding excessive costs or market distortions.

Regulatory Information:
- Regulation: Peraturan Presiden (PERPRES) Nomor 55 Tahun 2019
- Full Title: Percepatan Program Kendaraan Bermotor Listrik Berbasis Baterai (Battery Electric Vehicle) untuk Transportasi Jalan
- Signed: August 8, 2019
- Promulgated: August 12, 2019
- Status: Active (with amendments by PERPRES 79/2023)
- Official Source: https://peraturan.bpk.go.id/Details/116973/perpres-no-55-tahun-2019
- Lembaran Negara: 2019/No. 146 (22 pages)

Related Regulations:
- PERPRES 79/2023 - Amendment to PERPRES 55/2019
- INPRES 7/2022 - BEV Use in Government Fleets
- Permen ESDM 1/2023 - Charging Infrastructure
- Permenperin 6/2022 - TKDN Specifications

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