The Indonesian government has set a target for producing 400,000 electric vehicles, or 20% of all domestically produced cars, by 2025. The government also wants e-motorbikes to account for 20% of all domestic motorbike production, with motorcycles preferred over cars on a nationwide level, as per Climateworks Centre.
Indonesia’s electrification efforts through subsidies and incentives
The government has formulated various electrification strategies, including subsidies and incentives to achieve its electrification target. Reuters reported that Industry Minister Agus Gumiwang Kartasasmita announced on December 14 a subsidy of over $5,000 for each electric car sold.
Apart from that, the government will also provide incentives to electric motorbike and hybrid car buyers as it aims to cut carbon emissions in the country.
According to the minister, the government will provide a subsidy of about 80 million rupiahs ($5,131) for each sale of an electric car, 40 million rupiahs for hybrid vehicles, and 8 million rupiahs for completely electric motorbikes.
| New Energy Vehicle | Subsidy |
| Electric car | 80 million rupiah |
| Hybrid vehicles | 40 million rupiah |
| Electric motorbikes | 8 million rupiah |
Furthermore, the Indonesian government will also offer assistance of 5 million rupiahs for converting an ICE motorcycle to an electric motor.
How to qualify for the government program?
The electric vehicles must be manufactured by an Indonesian firm and in an Indonesian factory. This way, the government could also encourage domestic production and lessen foreign reliance in terms of electric vehicle adoption.
However, the implementation schedule is yet to be finalized, but it was previously stated to start by 2023.
Government initiatives have a significant impact on the uptake of electric vehicles. They can persuade their people to switch if they provide the appropriate amount of assistance.
