Next Year, the Government Will Provide Subsidies for Electric Vehicle Purchase


The government has prepared various ways to reduce carbon emissions, one of which is the use of electric vehicle. To support this ecosystem, the government will disburse subsidies for the purchase of electric vehicles in 2023.

This was confirmed by the Coordinating Minister for Maritime Affairs and Investment (Menko Marves), Luhut Binsar Pandjaitan.

Luhut said the government was discussing the amount of subsidy to be given to the public to buy electric vehicle. He stated that the amount of subsidy that will be disbursed is around Rp. 6 million specifically for subsidies for the purchase of electric motorbikes.

“Immediately we will launch electric cars with subsidies, for example, we are finalizing motorbikes. How many millions do we want to provide for motorbike subsidies? Maybe Rp. 6 million? In Thailand, maybe Rp. 7 million.” he said at the Welcoming Stronger Investment Post-Pandemic event, Tuesday (29/11/2022).

As with electric motorbikes, Luhut also said that the purchase of electric cars would receive subsidies. The aim is to reduce the purchase of fuel oil (BBM).

Based on the records of the Ministry of Finance (Ministry of Finance), the realization of energy subsidies which includes fuel has reached IDR 184.5 trillion as of October 31, 2022. This realization was recorded to be higher compared to last year’s position which reached IDR 144.4 trillion.

Luhut claims that the use of electric vehicles will encourage spending savings on transportation needs, especially for fuel.

“We still calculate that it will be more profitable to use electric motorbikes than fossil [fuel] motorbikes and cars,” he said.

In addition to purchases, the government is also preparing a subsidy scheme for converting vehicle engines from conventional to electric battery-based.

Previously, the Minister of Transportation (Menhub), Budi Karya Sumadi, said that the existence of incentives would reduce the cost of converting electric vehicles which are still expensive. He said the existence of assistance from the government could reduce up to half of the cost of conversion.

As for now, Budi Karya revealed that incentives for electric vehicles are still being discussed by cross ministries/agencies.