GIAMM urges electric vehicle makers to increase local component use
Bisnis Otomotif, 17 Sep '26
The Association of Automotive and Motorcycle Equipment Industries (GIAMM) is encouraging electric vehicle (EV) manufacturers to increase their use of domestically produced components, in line with the planned increase in the mandatory domestic component level (TKDN) to 60% in 2027.
GIAMM Secretary General Rachmat Basuki stated that the use of local components among electric vehicle manufacturers remains limited. One factor is the local content requirement, which currently stands at 40%.
"The component industry's supply to electric car manufacturers is still not abundant, considering that electric car manufacturers will begin assembly in early 2026, and the TKDN target is still 40%, and that's 30% for the assembly process," Basuki told the media on September 15th, 2026.
According to Basuki, the increasing number of electric vehicle manufacturers establishing manufacturing facilities in Indonesia needs to be accompanied by greater use of components sourced from the domestic industry.
Several Chinese automotive manufacturers are expanding their operations in Indonesia. BYD operates a production facility in Subang, West Java, with a capacity of 150,000 units per year and a total investment of IDR 16 trillion (US$ 901 million).
Wuling operates a manufacturing facility in Cikarang, West Java. Meanwhile, several Chinese manufacturers, including Chery, Geely, BAIC and Jetour, continue to use Handal Indonesia Motor (HIM)'s assembly facilities to assemble vehicles marketed in Indonesia.
"Perhaps with increasing sales and rising TKDN targets, electric car manufacturers will eventually increase their purchases of local components," he explained.
According to data from the Association of Indonesian Automotive Industries (Gaikindo), wholesale sales of battery electric vehicles (BEVs) increased by 97.6% from January to August 2026 compared with the same period of the previous year.
Basuki further stated that the utilisation rate of national automotive component factories currently stands at around 70%. This has limited additional investment by industry players to increase production capacity.
"There doesn't seem to be any additional investment at this time, considering the automotive market hasn't yet returned to 1 million. So, our capacity is still sufficient to meet the current demand from domestic car manufacturers," Basuki concluded.
