Indonesia wants to turn bikes into EVs, but red tape stalls funds

Indonesia wants to convert at least 200,000 conventional two-wheelers into electric vehicles (EV) by 2030. This comes as part of its US$455 million national program to make EVs more affordable.

In 2019, the then President Joko Widodo, who left office on October 20 this year, set Indonesia on this ambitious path to build a robust EV industry.

Since then, EV-specialized repair shops have rapidly emerged and are gearing up for this transition.

Putra Darmagita, owner of Electric Wheel in Denpasar, Bali, instructs local high school students on EV conversion/ Photo credit: Amilia Rosa

For 2024, the government is aiming to convert 4,000 units, but the actual number will likely be just over 1,300, according to local media reports.

Bureaucratic hurdles and safety checks have reportedly hindered the process.

A paperwork problem

So far, only two dozen repair shops in Indonesia have secured certification from the Ministry of Energy to convert bikes into EVs, a process that involves replacing engine and fuel systems.

In the long term, Indonesia is hoping to turn some of its 130 million two-wheelers – a figure that is the third largest in the world – into zero-emission vehicles. This transition is expected to lower operating costs, reduce pollution, and avoid adding more vehicles to the country’s already congested streets.

For now, repair shops can get 10 million rupiah (US$640) in subsidies on each vehicle they convert. In all, the government has earmarked 1.4 trillion rupiah (US$90 million) for this program.

“It’s a good government program, but we have paperwork problems,” Heret Frastio, CEO of Jakarta-based repair shop Elders Garage, tells Tech in Asia.

Elders, which opened in 2021 with the hope of capitalizing on Indonesia’s switch to EVs, has so far converted 200 bikes this year, Frastio says.

When the Ministry of Energy launched an app last year to connect vehicle owners with garages that can turn their vehicles into EVs, Elders said it received around 1,200 applications.

See also: Behind the Gojek-Gogoro breakup in Indonesia’s EV push

Most of the initial applicants were owners looking to revive their unused bikes. However, many of these units had expired registrations, which disqualified their owners from receiving the subsidy.

Keeping faith