Indonesia Announces Subsidies for Electric Motorcycles Starting March 2023

electric motors

The Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, has announced a subsidy of IDR 7 million per unit for electric motorcycles, effective from March 20, 2023.

Speaking at a press conference on the Electric Vehicle Incentive Program on Monday, March 6, 2023, Luhut stated that the technical details of the subsidy would be explained by the relevant ministries and agencies.

Luhut emphasized that the decision had reached its final stage and that the implementation of the government subsidy would begin soon. He clarified that the assistance would be given to the manufacturers, not the consumers.

“All have reached the final stage. I thank all the agencies that have helped and cooperated in solving the problems that seem difficult, but are not that difficult,” he said.

In addition to Luhut, the press conference was attended by the Head of Fiscal Policy Agency (BKF) Febrio Kacaribu, Minister of Industry Agus Gumiwang, and Secretary-General of the Ministry of Energy and Mineral Resources (ESDM).

The government is continuing to encourage the adoption of Battery-Based Electric Motor Vehicles (KBLBB).

According to Luhut, this step could attract investment related to the KBLBB industry in Indonesia. The government is also offering various attractive incentives that are not inferior to competitor countries such as Thailand.

“If that [investment] happens, the price of KBLBB will be more affordable in the future,” he added.

Luhut has issued the government’s KBLBB subsidy program as a first step in increasing the affordability of electric vehicles and stimulating a new automotive industry.

In this regard, the Ministry of Industry is responsible for implementing the budget for the new electric motorcycle subsidy.

On the other hand, the Ministry of Energy and Mineral Resources is responsible for implementing the government assistance program for converted electric motorcycles.

Furthermore, the government has set the subsidy specifically for electric motorcycle products with a Domestic Component Level above 40 percent. Three manufacturers, namely Gesits, Volta, and Selis, have registered for the subsidy program.

In total, the budget for the electric motorcycle subsidy is estimated to reach IDR 1.7 trillion, with a target of 250,000 units. However, the government has not yet disclosed the amount of subsidy for electric cars and buses.