The Southeast Asian nation of Indonesia aims to get more serious about promoting electric mobility than ever before, with the government announcing an allocation of Rs 7 million (or ¥38.17 billion) for subsidies to purchase electric two-wheelers by 2024. The scheme aims to facilitate the sale of 800,000 new electric two-wheelers and will also fund the retrofit of 200,000 internal combustion engine motorcycles.
The boost from government subsidies could be a big moment for a sales surge in Indonesia’s electric vehicle industry. As of October 2022, there will be only 32,000 registered electric motorcycle owners nationwide. However, the subsidy will help bring in a lot of new customers for the dealership, helping it significantly achieve its previously announced goal of registering two million electric two-wheelers by 2025.
Also read: Two-wheelers top Indonesia’s EV strategy
That said, given years of poor response to the adoption of electric two-wheelers, the Indonesian government did revise its projections and now aims to have at least 1 million electric two-wheelers on the road by the end of 2024. That may still be an achievable goal considering there are currently over 133 million registered motorcycle users in the country.
In addition to the subsidies for electric two-wheelers, the Indonesian government has also extended the incentives to 35,000 electric vehicles and 138 electric buses. Electric four-wheelers are not yet subsidized. Indonesia aims to reduce greenhouse gas emissions by 29% by 2030, and the transition to electric vehicles is expected to play a major role in bringing the country closer to that figure.
The country also has rich deposits of nickel and cobalt, which the government hopes will help it develop its own battery supply chain, bringing new business opportunities, jobs and export potential to the market. This also opens up space for several Indian EV players to expand their presence in Southeast Asian countries with ample room for growth.
First published date: March 23, 2023 at 12:16pm CST
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