Indonesia offers $110m in incentives to boost EV adoption

Photo credit: Shutterstock

Indonesia will launch an incentive program geared towards manufacturers, retailers, and individuals to increase sales and usage of electric vehicles (EVs) starting on March 20.

The subsidy program, estimated to be worth US$110 million, has a quota of 200,000 electric motorcycles, 35,900 electric cars, and 50,000 motorcycles converted to EVs within 2023.

For electric two-wheelers, including conversions, the incentive amount is set at 7 million rupiah (around US$456) per vehicle. To be eligible for this, a company must make sure that the motorbike is locally made or that at least 40% of its components are domestically sourced.

See also: Indonesia courts Tesla but faces EV roadblocks

The same amount of subsidy will also be given to individuals who convert their gasoline-powered motorcycles into electric vehicles.

President Joko Widodo has set a target of having at least 2 million electric motorcycles in Indonesia by 2025.

The government will also give assistance for those buying electric cars and buses, but it has not yet revealed the exact subsidy amount.

According to Reuters, senior cabinet minister Luhut Pandjaitan said the government has been in talks with two global car manufacturers to enter Indonesia and potentially produce vehicles there.

The government is also looking to speak with Tesla in the coming days, as Elon Musk’s EV maker is reportedly planning to build a factory in Indonesia with the capacity of rolling out 1 million cars per year.

However, one major roadblock is the country’s charging infrastructure. While there’s a program already set in place to set up chargers at homes through Perusahaan Listrik Negara, the state electricity company, Indonesia still lags behind countries like the US.

A version of this article was originally published by Mujahid Fidinillah on Tech in Asia Indonesia.

Currency converted from rupiah to US dollar: US$1 = 15,341.50 rupiah.