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Academic suggests to refocus electric vehicle subsidy budget on public transport

Tempo - January 10, 2023

Antara, Jakarta – The budget allocated for the planned incentives for electric vehicle (EV) ownership must be refocused on improving and enhancing public transportation, a Semarang-based academic has said.

"To increase the subsidy for the land transportation sector, it would be more prudent if the government and the parliament concurred to refocus the Rp5 trillion (US$320 million) electric vehicles incentives on improving and enhancing public transportation instead," a civil engineering academic at Soegijapranata Catholic University's Faculty of Engineering, Djoko Setijowarno, said, according to a statement issued on Monday.

As land transportation is the largest contributor to people's mobility, the subsidy could instead be provided to public transportation in urban regions or remote areas, he explained.

"We need to increase public transportation subsidy in the land transportation aspect, considering residents' mobility is mostly performed through the land," Setijowarno said.

Earlier, the government planned to provide Rp80 million (US$5,120) in incentives for electric cars, Rp40 million (US$2,560) for hybrid cars, and Rp8 million (US$512) for electric motorcycles.

Another Rp5 million (US$320) in incentives would be provided for every conventional motorcycle converted to an electric-powered one.

According to the Coordinating Minister for Economic Affairs, Airlangga Hartarto, the incentives are meant to assist residents who want to purchase EVs, considering that such vehicles are 30 percent more expensive than conventional vehicles.

"Our closes competitor, Thailand, also provides the same incentives. We need to expand the market to ensure electric cars will amount to 20 percent (of total vehicles in Indonesia) by 2025, which equals 400,000 units," Hartarto said.

The incentives will be distributed via different schemes under the fuel subsidy program, he added.

"This is not a subsidy but an incentive that we provide in rupiah. We are currently discussing with the finance minister regarding the planned allocation of the Rp5 trillion (subsidy) for motorcycles or cars, as well as buses," the minister said.

Source: https://en.tempo.co/read/1677648/academic-suggests-to-refocus-electric-vehicle-subsidy-budget-on-public-transpor