As part of an effort to have 10% of the population using green vehicles by next year, Indonesia will provide incentives to persuade 200,000 people to switch to electric motorbikes.
In addition to some current tax breaks, each new electric motorcycle will receive 7 million rupiah ($457) in subsidies, a group of government officials announced at a press briefing on Monday. They announced that additional incentives would be provided for 35,000 electric vehicles and 138 electric buses without offering any additional information.
Car manufacturers who have a factory in Indonesia and use at least 40% local components will receive incentives. The only automakers that comply with this requirement are Wuling Motors Holdings Ltd. and Hyundai Motors Co. of South Korea, according to Industry Minister Agus Gumiwang Kartasasmita.
He stated, “President Joko Widodo ordered us to match Thailand’s offer or even to give more than what Thailand offers. All of this is being done to attract investment from EV producers.
In Thailand, the government provides incentives for EVs such as reduced excise, road, and import taxes, as well as subsidies ranging from 70,000 baht ($2,000) to 150,000 baht per vehicle.
By the end of the following year, 10% of the population is expected to be EV users, according to Minister Luhut Panjaitan for Coordinating Investment and Maritime Affairs. Investors won’t come to us for sure if we don’t offer these incentives.
The incentives will run through December, beginning this month.
The goal of the subsidy is to triple domestic EV sales by 2030 while also luring in manufacturers to help President Joko Widodo achieve his goal of having an entirely domestic EV supply chain.
By encouraging Indonesia’s 275 million people to switch from combustion engines to electric vehicles, the state budget’s burden from fuel subsidies could be lessened.
To keep local gasoline prices low, the government set aside 336.7 trillion rupiah in budget for this year alone. Each time subsidies were reduced, there were large-scale protests.