Chery Group Indonesia To Produce EV Batteries Locally: Ramping Up Domestic Content To Meet 60% TKDN Mandate By 2027

Chery Group Indonesia to Produce EV Batteries Locally: Ramping Up Domestic Content to Meet 60% TKDN Mandate by 2027

Chery Group Indonesia is preparing a major supply chain overhaul in Southeast Asia’s largest automotive market, confirming plans to produce and source electric vehicle batteries locally. The move comes in direct response to the Indonesian government’s tightening domestic manufacturing regulations, which mandate that all four-wheeled battery-electric vehicles (KBLBB) achieve a Domestic Content Level (TKDN) of at least 60% starting in 2027.

Currently, completely knocked-down (CKD) electric vehicles assembled in Indonesia typically hover around a 40% domestic content baseline. Because high-voltage traction batteries account for 30% to 40% of an electric car’s total manufacturing value, localizing battery cell and pack integration is the single most critical lever automakers must pull to bridge the 20-point regulatory gap.

Indonesia’s Multi-Tiered TKDN Roadmap: Beyond Simple Assembly

Indonesia’s localized manufacturing requirements are governed under Presidential Regulation (Perpres) No. 79 of 2023—which revised earlier timelines under Perpres No. 55 of 2019—alongside Ministry of Industry Regulation No. 6 of 2022.

Under this national industrial roadmap, minimum local content requirements for electric four-wheelers scale upwards in three definitive stages:

Crucially, the Ministry of Industry calculates TKDN using comprehensive value-add auditing metrics rather than a straightforward parts count. Bolt-on assembly of imported components at local semi-knocked-down (SKD) or CKD partner facilities is insufficient on its own to meet the audited threshold.

Compliance requires verified domestic capital expenditure, local engineering labor, and direct material sourcing from Indonesian suppliers.

Anchoring Long-Term Investment in the ASEAN Hub

Meeting the 60% domestic content hurdle is vital for EV manufacturers operating in the republic. Maintaining certified TKDN compliance ensures continued eligibility for lucrative government tax incentives, including reduced value-added tax (PPN) subsidies, government fleet procurement tenders, and ongoing luxury sales tax exemptions.

By locking in local battery manufacturing ahead of the 2027 regulatory deadline, Chery Group is positioning its Indonesian footprint not merely as an assembly outpost, but as an integrated regional production hub capable of supplying localized electrified vehicles across the wider ASEAN trade corridor.