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Indonesia's electric motorcycle subsidy program off to a slow start

Jakarta Globe - January 4, 2024

Nabiel Gibran El Rizani, Jakarta. Indonesia's electric motorcycle program fell short of its target. Industry Minister Agus Gumiwang Kartasasmita revealed that the electric motorcycle subsidy program in 2023 saw a distribution of only 11,532 units, amounting to Rp 78 billion ($5 million).

This figure fell short of the initial target of 200,000 units, with a budget allocation of approximately Rp 1.4 trillion.

Agus said that the limited battery capacity of the vehicles, combined with the extended charging duration, is the cause of the low adoption of the subsidy program announced last March.

"For electric car and motorcycle consumers, one crucial factor is the battery. The battery must have a long duration, and it should be easy to charge. Especially for cars, fast charging is essential. If it takes 3-4 hours to charge, it is considered long. So, technology is now making electric car charging faster. Therefore, the battery is the key to the success of electric car and motorcycle programs," Agus said in Jakarta on Wednesday.

The Minister has been in talks with electric motorcycle manufacturers to encourage the adoption of standardized electric vehicle battery technology.

"This is the best moment for the government to push for this policy. Finally, I see that electric motorcycle and battery manufacturers are now on the same level playing field, thinking in the same way, making battery power standardization very important," he added.

Agus said that his ministry has set aside Rp 350 billion in subsidies for 50,000 electric motorcycles this year. The Minister is confident that the program's target can be met in 2024 as the eligibility conditions were streamlined in September.

In March 2023, The government announced that it would allocate Rp 7 trillion to subsidize the purchase and conversion of electric motorbikes over the next two years.

According to Finance Minister Sri Mulyani, each unit of brand new electric two-wheelers and a converted e-motorbike that originally ran on combustion engines will get a subsidy of Rp 7 million. These subsidies will be in effect for 2023-2024, and will only apply to 1 million electric motorbikes.

Source: https://jakartaglobe.id/business/indonesias-electric-motorcycle-subsidy-program-off-to-a-slow-star