BYD inaugurated its 11.7 trillion rupiah (US$655 million) electric vehicle factory in Subang, West Java, on September 3, after provincial authorities resolved land labor and infrastructure issues at the 126-hectare site. The plant is capable of building 150,000 vehicles a year, and West Java Governor Dedi Mulyadi said BYD had recruited nearly 9,000 workers so far, compared with an earlier estimate that the plant would need about 18,000. It's a big bet on a country where EV sales have already jumped sevenfold since 2023.
GAIKINDO reports EV sales of 103,931 units in 2025, up from 43,188 in 2024 and just 10,327 in 2022. In the Jakarta area electric cars now make up over 25 percent of new sales. For every four vehicles sold in Jabodetabek, one is electric.
Why this factory changes the stakes
The Subang factory will generate thousands of direct jobs and spur related sectors such as parts manufacturing and logistics. By assembling vehicles locally, BYD avoids the 10 percent import duty that applies to fully built-up cars, keeping prices competitive. The factory also supports Jakarta’s broader agenda to build a domestic battery supply chain and reduce dependence on imported fuel.
Workers on the assembly line will train in high-voltage safety and battery handling, skills that can transfer to other EV projects across Southeast Asia. A local supply base means fewer shipments of finished vehicles across oceans, reducing carbon emissions linked to transport. The factory’s output target matches Indonesia’s goal of producing at least 600,000 EVs per year by 2030.
Regulatory Landscape
Indonesia will end tax exemptions for imported electric vehicles beginning in 2026, meaning that any car shipped as a complete unit will face higher duties. To avoid the extra charge, manufacturers must assemble the cars in Indonesia under a CKD arrangement or partner with a local assembler. This policy pushes global brands to either build their own factories or partner with local assemblers.
Major players such as Geely, BYD, Citroen, VinFast, Great Wall Motor, Volkswagen, Xpeng and Maxus have already committed to local production. Xpeng operates an assembly plant in Purwakarta, West Java, and Great Wall Motor operates a plant in Wanaherang, Bogor. The combined investment from these seven manufacturers reaches roughly Rp15.4 trillion (US$918 million) and supports a combined annual capacity of about 281,000 vehicles.
The local price test
For buyers, the question is whether EVs stay affordable. BYD’s threefold sales increase since 2023 is partly due to price-competitive models, not just marketing. GAIKINDO notes that charging infrastructure has expanded, and government policies have softened the deal. With tax incentives tightening, the cost of imported vehicles will rise unless companies build locally.
What comes next
The Subang factory will operate with an initial workforce of about 9,000, but the plan calls for hiring up to 18,000 workers as output reaches full capacity. If hiring accelerates and local content rules stick, Indonesia will have more than a factory; it'll have a supply chain. The government wants nickel-based battery incentives to compete with cheaper LFP cells, and the EV tax rules from 2026 are designed to force that. It's not a gift. It's a price for entry.
The real test is whether buyers keep buying when tax breaks vanish for non-local producers. BYD's Subang plant is the first big move in that game, not the last. If it holds, other brands will follow. If it doesn't, the 15 percent national EV share could stall.
Indonesia plans to install 10,000 public charging points by the end of 2026, up from about 3,000 today. State utility PLN will operate many of these stations near toll roads and shopping malls, making long-distance EV travel more practical. More chargers mean less range anxiety, which remains the biggest barrier for first-time buyers.
West Java Governor Dedi Mulyadi said the state will fast-track permits for any EV project that meets local content targets. The province has reserved additional land near the Subang site for battery factories and component makers. That land bank could attract more than Rp10 trillion (US$560 million) in related investment over the next five years.
BKPM head Rosan P. Roeslani said seven EV manufacturers have already established production facilities in Indonesia, with a combined annual capacity of 281,000 units. The list includes VinFast, Volkswagen, BYD, Citroen, AION, Maxus and Geely. More companies are expected to announce new investments before 2026.
The real test is whether buyers keep buying when tax breaks disappear for non-local producers. BYD's Subang plant is the first big move in that game, not the last. If it holds, other brands will follow. If it doesn't, the 15 percent national EV share could stall.
Indonesia plans to install 10,000 public charging points by the end of 2026, up from about 3,000 today. State utility PLN will operate many of these stations near toll roads and shopping malls, making long-distance EV travel more practical. More chargers mean less range anxiety, which remains the biggest barrier for first-time buyers.
For now the line is running, workers are clocking in, and the first cars are rolling off the assembly line. The coming months will show whether Indonesia’s EV experiment can survive the loss of import incentives and grow into a self-sustaining industry.
Read more EV desk coverage | Reuters: BYD Indonesia factory story
Charging Network Expansion
Indonesia aims to build 60,000 charging points by 2030, a tenfold jump from current levels, and state utility PLN will manage most of them along major highways and urban centers. The government also plans to subsidize home charger installations for low-income households, which should lower total ownership costs and accelerate adoption. These investments are critical if the country wants to turn its EV growth from a temporary surge into a permanent industry.
The government expects that by 2028 local assembly plants will supply at least 60 percent of new EV sales, and that domestic battery production will supply half of the market. If that trajectory holds, Indonesia could become a regional export hub for affordable electric vehicles within the next decade. It is an ambitious timeline, and it depends entirely on maintaining policy consistency through the next few election cycles.