Indonesia Launches New EV Subsidy Scheme

Indonesia today launched a new subsidy program aimed at increasing the country's adoption of electric vehicles. A subsidy of seven million rupiah (RM2,040) will be provided to eligible buyers of new electric motorcycles or scooters under the scheme, which is limited to 200,000 units. The same sum is also being offered to 50,000 customers who convert their internal combustion engine motorcycles or scooters to run entirely on electricity.

To qualify, customers must bring their roadworthy motorcycles or scooters with engine capacities ranging from 110 to 150 cc to conversion workshops certified by the local transport ministry, along with the necessary documentation.

Aside from two-wheelers, subsidies will be provided for the purchase of each electric car and bus.

In addition to subsidies for 250,000 electric motorcycles or scooters this year, the government will subsidize purchases of up to 35,900 electric cars and 138 electric buses, though the amount of the subsidies has not been disclosed.

The overarching requirement for these subsidies is that vehicles be manufactured in Indonesia with at least 40% local content. This is undoubtedly intended to entice more companies to establish local EV assembly plants. According to Nikkei Asia, the Hyundai Ioniq 5 and Wuling Air EV currently meet this requirement because they are manufactured in the country, while two-wheelers from Gesits, Volta, and Selis also do.