TOYOTA MOTOR has officially announced its plans to begin electric vehicle (EV) production in Indonesia within 2025, marking a major strategic shift in the company’s regional manufacturing operations. This move aligns with Indonesia’s government-led push to accelerate EV adoption through generous tax incentives for locally assembled electric cars.
As part of this expansion, Toyota will start assembling its bZ4X all-electric SUV in Indonesia. This decision places the Southeast Asian nation alongside Japan and China as one of only three global manufacturing locations for the bZ4X. The company also confirmed it will begin production of electric pickup trucks in Thailand later this year, reinforcing its commitment to electrifying its commercial and passenger vehicle offerings in the region.
Toyota’s long-standing presence in Indonesia, where it commands over 30% of the automotive market, has previously been centred around hybrid vehicle manufacturing. However, this latest development marks Toyota’s first foray into full EV assembly in the country, positioning it in direct competition with a wave of Chinese manufacturers that have recently entered the Indonesian EV sector.
Hiroyuki Ueda, President Director of Toyota-Astra Motor–the joint venture between Toyota and Astra International–emphasised that the move supports Toyota’s broader “multi-pathway” strategy toward carbon neutrality. He stated that Toyota has already introduced a variety of environmentally friendly vehicles and is now expanding that portfolio with full-electric models aimed at giving consumers more sustainable options.
Indonesia has become increasingly attractive for global automakers looking to capitalise on EV incentives. Under the country’s current regulations, vehicles with at least 40% local content benefit from a significantly reduced value-added tax (VAT) of just 1%, compared to the standard 11%. These vehicles are also exempt from the luxury goods tax. Additionally, automakers that commit to producing EVs in Indonesia can access further incentives, including exemptions from import duties and other tax relief measures introduced by the government in 2023.
