Indonesia Sets Aside $455 Million to Subsidise Electric Motorcycle Sales

Indonesia will allocate 7 trillion rupiah ($455.88 million) in state funds to subsidise electric motorcycle sales through 2024, officials said on Monday, as it pushes mass adoption of EVs with the aim of attracting investment in the domestic industry.

The government will also announce incentives for electric cars on April 1, said senior cabinet minister Luhut Pandjaitan said.

Finance Minister Sri Mulyani Indrawati said the subsidies will cover sales of 800,000 new electric motorcycles and the conversion of 200,000 combustion engine motorcycles.

“We are launching this programme so that massive adoption of battery electric vehicle can be achieved soon, and the Indonesian transportation industry can be transformed to a greener industry,” Luhut said at a news conference.

Vehicles eligible for the subsidy have to meet minimum local content requirements, he said.

There were nearly 32,000 electric motorcycles on Indonesia’s roads as of October last year, according to media reports citing data from the Association of the Indonesian Motorcycle Industry.

The government hopes that adding another 1 million by 2024 will help reduce fossil fuel consumption and develop EV production facilities to take advantage of the country’s rich nickel reserves, an important material to produce batteries.