Indonesia’s automotive landscape is undergoing a major transformation as imported BEV cars (Battery Electric Vehicles) flood the domestic market. This wave of imports is significantly impacting consumer preferences and sales dynamics, particularly causing a noticeable decline in the popularity of hybrid vehicles. Once considered a stepping stone toward full electrification, hybrids are now being overshadowed by fully electric models that are becoming more accessible, desirable, and government-supported.

In June 2025, local news reported a steep shift in market demand, with imported BEV cars taking center stage, prompting industry observers to reevaluate the trajectory of Indonesia’s vehicle electrification strategy. As the government aggressively pushes for greener transportation alternatives, manufacturers, dealers, and consumers are adapting to the rapidly changing playing field.

The Surge of Imported BEV Cars in Indonesia

Indonesia has seen a dramatic influx of imported BEV cars over the past year. This is largely fueled by the government’s pro-EV policy stance, which includes import duty exemptions, VAT reductions, and various local incentives aimed at accelerating the adoption of electric vehicles.

Brands such as Tesla, BYD, Hyundai, and Neta have all capitalized on this momentum, offering high-tech, stylish, and competitively priced electric vehicles directly from manufacturing hubs like China and South Korea. According to data from the Association of Indonesia Automotive Industries (Gaikindo), BEV imports have grown by over 400% compared to the previous year.

The main appeal of imported BEV cars lies in their increasingly affordable prices and their exemption from luxury taxes, which often made hybrids and even internal combustion vehicles less competitive. Consumers are now finding BEVs not only greener but also financially viable, especially in major cities such as Jakarta, Bandung, and Surabaya.

This shift is also supported by improved EV infrastructure, particularly the expansion of charging stations across Java and Sumatra. As range anxiety begins to ease, BEVs are no longer seen as niche or experimental—they’re mainstream.

Hybrid Vehicles Lose Ground Amid EV Boom

Just a year or two ago, hybrid cars were hailed as a practical transitional solution in Indonesia's journey toward electrification. Combining internal combustion engines with electric motors, hybrids promised better fuel efficiency while easing concerns about charging availability.

However, with the explosion of imported BEV cars, hybrids have quickly lost their shine. Their higher price point—due to being classified similarly to traditional fuel vehicles for taxation purposes—has made them less attractive compared to fully electric options.

According to recent market insights, hybrid car sales have dropped sharply in Q2 2025. Toyota, which had aggressively pushed hybrid models like the Corolla Cross and Innova Zenix, is now facing stiff competition from BEVs that offer full electric capabilities at similar or even lower price points.

Industry experts argue that government policies play a major role in this transition. While hybrid cars do receive some tax breaks, they don’t enjoy the same level of incentive as BEVs. The result is a widening price gap and a growing perception among consumers that hybrids are outdated or merely temporary solutions.

In essence, imported BEV cars are not just competing—they’re winning. And hybrids, once seen as the middle ground, are increasingly being skipped in favor of full electrification.

Policy, Infrastructure, and the Consumer Mindset

Indonesia’s Ministry of Industry and the Coordinating Ministry for Maritime and Investment Affairs have made it clear: BEVs are the future. The government aims for 20% of all new car sales to be electric by 2026, and up to 50% by 2030.

To support this, the government is offering a variety of incentives for EV purchases, including:

• 0% import duties for certain brands and models
• 11% VAT discount for EVs meeting local content requirements
• Subsidies for consumers buying locally assembled EVs
• Infrastructure development, with PLN and private players expanding the public charging network

The consumer mindset is also changing. In urban centers, younger buyers and environmentally conscious professionals are opting for imported BEV cars due to their status symbol, eco-friendly credentials, and advanced features such as autonomous driving support and over-the-air updates.

Even fleet operators, such as ride-hailing services and logistics companies, are beginning to shift toward BEVs, citing lower total cost of ownership and operational savings.

Meanwhile, hybrid vehicles, which still rely on fossil fuels to a certain extent, are being perceived as less future-proof. This perception is accelerating their market decline, especially in comparison to the exponential rise of imported BEVs.

Challenges Ahead for Local Manufacturers

The surge of imported BEV cars presents both opportunities and challenges for Indonesia’s domestic auto manufacturing industry. On the one hand, increased consumer interest in EVs is a welcome development. On the other, the heavy influx of imports could hinder the growth of local EV production.

Manufacturers like Wuling and Hyundai have invested heavily in building local production facilities in Indonesia, expecting to benefit from domestic content rules and access to raw materials such as nickel for battery production. However, they now face a new challenge: competing with cheaper, already-assembled imported models that enjoy similar tax breaks.

The government’s localization requirement policy—where EVs must contain at least 40% local components to qualify for maximum incentives—is an attempt to strike a balance. But this policy is still maturing, and in the short term, the local EV industry must work harder to match the scale and price competitiveness of imported BEV offerings.

Unless this balance is carefully managed, imported BEV cars could end up dominating the Indonesian market, leaving local manufacturers playing catch-up.

The Indonesian automotive sector is experiencing a rapid and profound shift as imported BEV cars reshape consumer preferences, policy focus, and competitive dynamics. Hybrid vehicles, once the default choice for eco-conscious consumers, are now struggling to maintain relevance amid a BEV boom fueled by favorable government policies and improved infrastructure.

As more players enter the Indonesian EV market, the focus will need to move beyond just imports. Local manufacturing, battery supply chains, and charging ecosystems must be strengthened to ensure that the transition to electric vehicles is both sustainable and beneficial to the national economy.

One thing is clear: the era of the hybrid may be coming to an end, and the road ahead is fully electric.