Indonesia plans to subsidise EV sales next year

INDONESIA plans to subsidise sales of electric cars and motorbikes (EV) starting next year so that they become more affordable, a senior government minister said on Tuesday (Nov 29).

Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan said the government is finalising a scheme to subsidise about 6.5 million rupiah (S$568) per purchase of electric motorbike to drive sales in South-east Asia’s largest economy.

A similar subsidy scheme is being considered for cars, the minister said, without providing details.

“If you want to swap your motorbike to electric one next year, do it. You will get a subsidy,” he told a banking forum.

Indonesia has a target of at least 1.2 million electric bike adoptions and 35,000 electric car adoptions by 2024.

Industry groups have said demand for EVs is growing but the sales volumes were still very small compared to combustion engine cars in the country of 270 million people due to the higher price of EVs.

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Indonesia is keen to develop its own EV and battery industries at home, after banning exports of nickel ore to ensure supply for investors in processing since 2020.

Jakarta has already provided a tax cut for sales of EVs and hybrid cars since 2019. REUTERS