Indonesia’s EV market shows strong growth despite broader industry challenges

Jakarta, 17 June 2025 – Refer to PwC’s Electric Vehicle Sales Review Q1 – 2025, global battery electric vehicle (BEV) sales enjoyed substantial growth year on year in the first quarter of 2025, increasing by 42%. This jump resulted in the highest global BEV Q1 market share on record, at 16%. Much of that rise can be attributed to China, which was responsible for more than 60% of global BEV sales and therefore dominates the market. Boosted by continued government stimulus measures, BEV sales grew there by 55% in Q1 2025 vs. Q1 2024. This growth led to the highest-ever BEV market share in China in the first quarter of the year (27%).

Indonesia’s electric vehicle (EV) market (including BEV, PHEV/Plug-in hybrid electric vehicle, and hybrid) is experiencing growth, with total EV sales soaring by 43.4% year-on-year in the first quarter of 2025. The report highlights that 27,616 EVs were sold in Indonesia in Q1 2025, up from 19,260 units in the same period last year. This surge was driven by a 152.5% increase in battery electric vehicle (BEV) sales and a remarkable 44.8% rise in PHEV sales.

This momentum is supported by a range of government initiatives, including a 100% luxury sales tax exemption for EV imports and sales throughout 2025, and the extension of VAT exemptions. Indonesia is also leveraging its position as the holder of the world’s largest nickel reserves to build an integrated EV supply chain. The government aims to become the third-largest electric battery producer globally by 2027 and targets 600,000 EVs produced domestically by 2030, with 2 million BEVs on the road by then.

Despite this growth, the broader automotive market in Indonesia has faced headwinds. A VAT increase from 11% to 12% in January 2025 led to higher vehicle prices, which in turn affected consumer purchasing behaviour. Combined with high interest rates and economic uncertainty, this has contributed to a cautious market environment.

While the EV segment is thriving, the broader automotive market in Indonesia has been under pressure, with total light vehicle sales declining over the past two years due to economic uncertainty, high financing costs, and shifting consumer preferences toward more affordable or sustainable options.”

Lukmanul Arsyad, PwC Indonesia Industry and Services Leader & Partner, said, “Nevertheless, the EV segment remains a bright spot, driven by foreign direct investment, favourable tax policies, and infrastructure development such as charging stations. The EV share of total passenger vehicle sales in Indonesia rose from 9% in 2023 to 15% in 2024 and is projected to reach 29% by 2030.”