Jakarta (ANTARA) – The Indonesian government's planned incentives for nickel-based electric vehicles (EVs) could strengthen Indonesia's battery industry and support mineral downstreaming, Gadjah Mada University (UGM) energy economist Fahmy Radhi said.He said the policy could help direct the development of Indonesia's EV industry toward greater integration with domestic resources.”Providing incentives for nickel-based vehicles is a good move because Indonesia produces nickel, which can support downstreaming and strengthen the national EV ecosystem,” Fahmy said in a statement in Jakarta on Tuesday.He added that differentiating incentives between nickel-based and non-nickel-based EVs is more targeted than previous policies, particularly as incentives for completely built-up (CBU) imported EVs are gradually reduced.According to him, the policy is increasingly relevant as Indonesia's EV market continues to expand rapidly.Gaikindo data showed battery electric vehicle (BEV) sales rose from 56,204 units in 2024 to 114,413 units in 2025.However, the market remains dominated by lithium iron phosphate (LFP)-based EVs, whose technology and raw materials are not yet produced domestically.Processed Gaikindo wholesale data showed LFP-based EVs accounted for more than 80 percent of the market in 2024, while nickel-manganese-cobalt (NMC)-based vehicles made up less than 20 percent.In 2025, NMC-based EV sales grew faster than LFP-based vehicles, although LFP technology still dominated the market.Fahmy said the trend shows Indonesia still has significant room to optimize the use of domestic resources in the EV industry.He warned that if EV growth continues to be dominated by LFP technology, much of the industry's added value could flow abroad.”The most important thing is how Indonesia can use this opportunity to build an end-to-end EV industrial ecosystem,” he said.Fahmy said the government must also ensure the development of domestic production facilities, higher local content, and technology transfers from foreign investors to build an independent EV industry.He added that state mining holding company MIND ID could play a strategic role in strengthening nickel downstreaming and the national battery industry, including by partnering with foreign investors with NMC battery technology.Indonesia's Finance Ministry is preparing incentives for 100,000 electric cars and 100,000 electric motorcycles, scheduled to take effect in June 2026.For electric motorcycles, the government plans incentives of Rp5 million (around US$280) per unit. For electric cars, the incentives will take the form of government-borne value-added tax subsidies covering 40-100 percent of purchases.The tax subsidy will apply only to EVs, excluding hybrids, with the amount determined by battery type, categorized into nickel-based and non-nickel-based batteries.