Indonesia has lowered its value-add tax (VAT) on battery-based electric vehicle sales to 1 percent from 11 percent to encourage the adoption of EVs, a government ministry said on Monday, as the Southeast Asian country steps up efforts to attract investment into domestic production, Reuters reported.

The incentive came into effect this month and will remain in place until the end of the year, the Coordinating Ministry of Maritime and Investment Affairs said in a statement, according to the report. A VAT cut was also applied to some electric buses, it added.

Officials have been trying to attract investment from electric car makers including US-headquartered Tesla and China’s BYD Auto.

Indonesia is stepping up efforts to lure investment into domestic production of EV batteries and EVs to utilize its rich reserves of nickel, which is processed for battery production.

South Korea’s Hyundai and LG have started constructing plants to assemble batteries and EVs in Indonesia.

It was reported last month that Indonesia said it would allocate 7 trillion rupiah ($466.70 million) in state funds to subsidize electric motorcycle sales through 2024.

Indonesia to provide incentives to boost EV sales, attract investment – report