Antara, Jakarta – The government is evaluating subsidies for electric vehicle (EV) purchases as they don't seem to significantly boost demand, an aide of the president has said.

Under the incentive program, the government slashes the value-added tax on electric car purchases to just 1 percent provided the EV has 40 percent of locally-made components.

It also handsomely rewards electric motorcycle buyers with a Rp 7 million subsidy under certain conditions for the first 200,000 buyers.

But according to the Sisapira website, which provides information about electric two-wheeler vehicle purchases, only 805 electric motorbikes have been sold with government subsidies.

The untapped government subsidy for more than 199,000 remaining e-motorcycles is equivalent to Rp 1.4 trillion. The data on electric car purchases have not been provided yet.

"We are particularly concerned about why the government assistance ... has such a low absorption rate. This is something we will continue to evaluate, whether it is related to lengthy restitution processes or other things," Moeldoko, the Chief of the Presidential Staff, was quoted by Antara news agency as saying on Wednesday.

The electric motorcycle subsidy is intended for micro and small business entrepreneurs, workers who receive wage subsidies from the government, and low-income families as indicated by their home-installed electrical power measurement of 900 VA or below.

Moeldoko added that he will soon hold a meeting with Chief Investment Minister Luhut Binsar Pandjaitan to discuss this issue.

"We will address the issue and find answers as to why the uptake is slow. There must be a time for evaluation and whether new policies will be issued next," he said.

Source: https://jakartaglobe.id/business/govt-reviews-ev-incentives-as-purchases-remain-lo