Indonesia announces 7 trillion in subsidy to boost electric two-wheeler sales

The South East Asian country of Indonesia aims to push electric mobility, more seriously than ever, and the government has announced apportioning 7 million rupiahs (or ₹3,817 crore) in subsidies for electric two-wheeler purchases through 2024. The program aims to promote the sale of 800,000 new electric two-wheelers and will also fund the conversion of 200,000 combustion-engine motorcycles.

The boost from the government subsidy could be a big moment for Indonesia’s electric mobility sector when it comes to getting a jump in volumes. As of October 2022, only 32,000 electric motorcycle owners were registered in the country. However, the subsidies will help bring a host of new customers to dealerships, helping it significantly achieve the previously announced goal of registering two million electric two-wheelers by 2025.

That said, given the dismal response to the adoption of electric two-wheelers over the years, the Indonesian government did revise its expectations and is now targeting to have at least one million units on the roads by the end of 2024. That may still be an achievable goal considering the country has over 133 million registered motorcycle users currently.

In addition to the subsidies for electric two-wheelers, the Indonesian government will extend incentives to 35,000 electric vehicles and 138 electric buses. The subsidies are yet to be made available for electric four-wheelers. Indonesia aims to achieve a 29 per cent reduction in greenhouse gas emissions by 2030 and the transition to EVs is expected to play a major role in bringing the country closer to that number.

The nation is also rich in nickel and cobalt deposits, which the government hopes will help it develop a battery supply chain of its own, bringing new business opportunities, jobs, and export potential to the market. This also opens room for several Indian EV players to expand their presence in the South East Asian nation with ample room to grow.