Tax cuts and traffic exemptions under consideration
The Ministry of Industry's proposal extends beyond conventional hybrids to plug-in hybrid electric vehicles (PHEVs) and range-extended electric vehicles (REEVs), according to Kompas.id.
Sarmuji said possible measures include tax reductions, exemptions from odd-even traffic restrictions, dedicated parking and charging infrastructure suited to each vehicle type. Financial support would not necessarily match the incentives for battery electric vehicles (BEVs). He hopes to implement the policy this year, with early 2027 expected if that timetable proves unworkable.
The ministry also pointed to global oil prices exceeding $110 a barrel on October 21, 2026, as a reason to accelerate the development of energy-efficient vehicles.
A buyer weighs taxes, traffic and charging
Consumer responses to the proposed incentives have been mixed. Lower operating costs and possible relief from Jakarta's odd-even traffic rules are attractions, while vehicle prices and access to charging remain concerns.
For Yuli Safitri, a mother of two in Bekasi, West Java, charging availability outside Jakarta is one reason to consider a hybrid. She drives her children to school each weekday, while her husband uses the household's other gasoline-powered car to commute to work.
Yuli told The Jakarta Post that she was considering replacing one of those cars with a battery EV to benefit from lower charging costs, lower annual vehicle taxes and exemption from the odd-even restrictions. Comparable incentives for hybrids, however, would make her more interested in buying one.
"Hybrid car prices are still manageable, I think, but tax relief is definitely important. At the very least, it should be roughly comparable to what EVs receive," she said. She also wanted more flexibility for hybrids under the traffic rules, saying the restrictions otherwise force her to take detours and contend with congestion.
Hybrid gains concentrated in two Toyota models
Hybrid wholesale distribution reached 65,968 vehicles in the first nine months of 2026, a 42.66 percent increase from a year earlier, according to the Association of Indonesian Automotive Manufacturers (Gaikindo). Hybrids represented 9.72 percent of total car sales.
That nine-month tally exceeded the 65,943 hybrids sold during all of 2025, RCTI+ / Sindonews reported. The increase followed the expiration of a 3 percent government-borne luxury-goods tax incentive, known as PPnBM DTP. While that incentive was in effect in 2025, hybrid sales grew about 10 percent.
Much of the 2026 growth came from Toyota's Veloz Hybrid, which launched in February at an introductory price of Rp 299 million. Its wholesale distribution totaled 18,106 units through September. The Kijang Innova Zenix Hybrid recorded another 20,215 units, giving the two models a combined share of about 58 percent of the hybrid market, according to RCTI+ / Sindonews.
Without the Veloz Hybrid, the remaining hybrids totaled roughly 47,900 units, almost unchanged from January-September 2025.
BEVs remained ahead of hybrids. According to detikOto, they reached 117,218 units in January-September 2026, accounting for 17.26 percent of Indonesia's 679,020-vehicle market. PHEVs posted the fastest growth from a small base, rising 209.5 percent to 10,264 units, RCTI+ / Sindonews reported.
INDEF urges government to prioritize BEV support
The INDEF Green Transition Initiative has called for delaying new fiscal incentives for hybrids, PHEVs and REEVs until the government implements its promised BEV incentives and evaluates their effect on fuel consumption. The group argues that BEVs save the most fuel for each rupiah spent on incentives.
As of mid-October 2026, the implementing regulation for the promised government-borne value-added tax incentive for BEVs, or PPN DTP, had not been issued, the group noted.
INDEF GTI cited figures showing that subsidized and compensated fuel consumption had reached about 13.4 million kiloliters as of September, an increase of 9.1 percent from a year earlier. Energy subsidy and compensation spending stood at Rp 376.8 trillion, equivalent to 84.3 percent of the ceiling in the 2026 state budget.
