Maka Motors reduces workforce by 40%, blames EV subsidy pause

Indonesia-based electric vehicle startup Maka Motors has laid off 40% of its staff, leaving the company with just 220 people, a company representative confirmed to Tech in Asia.

Full-time and part-time employees of its sales department were affected by the move. DealStreetAsia first reported the news.

“The challenging dynamics of the electric motorcycle market have made a strategic restructuring of our organization necessary,” the representative said. “This is primarily due to external factors beyond our control.”

Maka Motors co-founder and CEO Raditya Wibowo / Photo credit: East Ventures

The suspension of Indonesia’s EV subsidy program, which previously provided 7 million rupiah (US$429) to those purchasing electric bikes, has slowed down sales, the company said.

“There’s been a lower approval rate from leasing companies for motorcycle financing in general, not just for electric motorcycles. These conditions require us to adapt and transform to ensure our company’s future sustainability and growth,” the representative added.

In January, the startup told Tech in Asia that it was targeting to sell 15,000 units of its Maka Cavalry motorbike, which is priced at 35.9 million rupiah (US$2,194). However, the startup confirmed it has not managed to breach the 1,000 mark in bike sales.

See also: Unpacking Maka Motors’ long-awaited EV debut

Moving forward, Maka Motors said it’s looking at bike rental and rent-to-own schemes targeted at delivery riders to boost bike sales.

That’s a tall order, as a survey in Indonesia revealed that consumers are only willing to pay 10 million rupiah (US$644) on an electric bike.

Still, the startup is looking to opening new showrooms and is “actively exploring” fleet partnerships.

This development comes as the electric bike industry in Southeast Asia faces headwinds, with government enthusiasm in EVs waning.

See also: Subsidies fuel Indonesia’s 2W EV growth, but at what cost?

Blitz, a last-mile delivery startup that uses electric bikes, also had to trim its workforce last month. In April, TVS Motor acquired EV manufacturer Ion Mobility, as the latter struggled to bring its flagship electric bike to market.