Eight electric motorcycle companies had successfully qualified to receive the electric vehicle subsidy from the government. Through the subsidy, the motorcycle companies will receive a subsidy of Rp 7 million for one electric motorcycle unit. The Industry Ministry’s director general of metals, machinery, transportation equipment, and electronics industry (ILMATE) Taufiek Bawazier, said that the eight companies had fulfilled the government’s condition that requires companies to produce the motorcycle with 40% of local components ratio.
“The number of electric motorcycle companies which have 40% local component ratio is currently eight companies with 13 models of motorcycle,” Taufiel said on March 21, 2023.
Starting on March 20, 2023, the government has provided subsidies for battery electric vehicles (BEVs), particularly electric motorcycles, to help spur the new energy automotive industry development. The subsidy is the government’s first step to increasing the affordability of electric vehicles and people’s purchasing power to buy BEVs.
Taufiek also said that the government is aiming to encourage people to switch to electric vehicles to reduce fossil fuel consumption and create a healthier environment. In 2023, the government has set a target of 200 thousand sales of new electric motorcycles and 600 thousand sales of new electric motorcycles in 2024.
The following is the list of the 13 electric motorcycles that qualify for the Rp 7 million per unit subsidy from the government:
1. Gesits G1 (PT Wika Industri Manufaktur)
2. United T1800 (PT Terang Dunia Internusa)
3. United TX3000
4. United TX1800
5. Smoot Elektrik Tempur (PT Smoot Motor Indonesia)
6. Smoot Elektrik Zuzu
7. Volta 401 (PT Volta Indonesia Semesta)
8. Selis E-MAX (PT Juara Bike)
9. Selis Agats
10. Viar New Q1 (PT Triangle Motorindo)
11. Rakata X5 (Artas Rakata Indonesia)
12. Rakata S9
13. Polytron PEV 30M1 (PT Hartono Istana Teknologi
Indonesian Government Launches Subsidies and Fiscal Incentives for Electric Vehicle
Coordinating Minister of Maritime and Investment Affairs Luhut Binsar Pandjaitan and Finance Minister Sri Mulyani Indrawati announced government subsidies and financial incentives that will be provided for the electric motorcycle industry. The stimulus and incentives are expected to help in driving the development of the electric vehicle industry in Indonesia.
The massive adoption of electric motorcycles, along with the introduction of other supporting policies, will hopefully help to transform the transportation industry into a greener industry and strengthen Indonesia’s position in the value chain of the electric battery industry.
“The acceleration of the EVs program will positively impact job creation. In addition, electric motorcycles are domestic products. Whoever produces electric motorcycles will be certified by the industry ministry. The Ministry of Energy and Mineral Resource will provide a service center for certified electric motorcycles,” said Luhut on March 20, 2023.
Finance Minister Sri Mulyani Indrawati said that the government would grant fiscal incentives in the form of a 32 % tax reduction from the selling price of electric cars and an 18% of tax reduction from the selling price of the electric motorcycle.
“Government subsidy for new electric motorcycle and the conversion of a conventional motorcycle to an electric motorcycle is Rp 7 million. And the conversion subsidy will last for two years [2023-2024] for 1 million new electric motorcycles and converted motorcycles with a total budget of Rp 7 trillion. The industry ministry will manage the government subsidy for new electric motorcycles, and the ministry of energy and mineral resource for converted motorcycles. The requirement is that the electric motorcycles are produced in Indonesia with 40% local components ratio,” explained Sri Mulyani.
Minister Sri further said that the incentive for added value tax of electric cars and buses in 2023, in which the local component ratio is above 40% following the program of the ministry of industry, will be granted a 10% incentive for value-added tax, which will bring the applicable value-added tax to only 1% . Next, electric buses with around 20% to 40% local components ratio will be provided with a 5% value-added tax subsidy, which will bring the applicable value-added tax to 6%. These incentives are effective on March 21 for electric motorcycles and will be effective on April 1, 2023, for electric cars and buses.
Indonesia Competes with Other Countries to Develop EV’s
Luhut explained that if Indonesia learns from other countries that are progressively developing EV with various incentives, Indonesia has a risk of being nothing but a market for EVs if we act slowly. The government hoped that by accelerating the development of EV program, Indonesia could compete with other countries to attract investment.
“This program is part of the government’s efforts to increase Indonesia’s energy independence. Indonesia is a net importer of fossil fuels, so increasing EV adoption can reduce dependency on fossil fuels and strengthen Indonesia’s trade balance. If we succeed in transforming and electrifying our transportation sector, Indonesia can reduce the negative impact of greenhouse gas to meet the Net Zero Emission commitment and give better environmental quality for our grandchildren,” said Luhut.
Luhut added that currently, Indonesia has constructed a Lithium Processing Plan in Morowali, Central Sulawesi, with a production capacity of 60,000 tons per year—one of the biggest in the world. “So we entered into these two sectors. We develop a renewable energy ecosystem to replace fossil energy. We are developing the ecosystem gradually. We hope the proportion of sales and the condition of electric motors and cars in Indonesia can achieve 10% this year until 2024. For non-electric vehicles, we will do this gradually. Currently, there are seven locations for conversion. So gradually, we will evaluate,” Luhut concluded.
