Subsidies power Indonesia’s 2W EV surge

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Hi readers,

Electric scooters have become a more familiar sight in Surabaya, Indonesia’s second-largest city after Jakarta. As a Surabaya resident, I encounter two-wheeled (2W) electric vehicles (EVs) almost every day on my commute, though they’re still far outnumbered by their gas-fueled counterparts.

Showrooms for various EV brands have been cropping up over the past year, indicating growing market interest. Yet despite competitive pricing (thanks to government subsidies), many people remain hesitant to make the switch to 2W EVs.

But this isn’t just about price, as some EV models are even cheaper than the popular fuel-powered Honda Beat. Instead, reliability stands out as a core concern. Industry insights and consumer surveys repeatedly point to the same issue with 2W EVs: poor performance.

I once saw two men pushing an electric scooter up a flyover because it didn’t have enough power to do the climb. Incidents like this certainly don’t inspire confidence, especially when traditional motorcycles rarely face such problems.

While there are certainly high-performing EVs available, some models simply aren’t suited to Indonesia’s roads. Many are rebranded Chinese models with minimal or no modifications for local conditions – a problem partly due to the lack of performance standards in the government’s subsidy program.

This is an issue that could be addressed, but would it be? Currently, the subsidy program has hit its quota and is on pause until further announcements from the new administration. Without these incentives, can the EV sector keep its momentum? And what does this mean for the future of EV startups in Indonesia?

— Glenn Kaonang, journalist at Tech in Asia

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