Indonesia's Electric Motorcycle Conversion Remains Unpopular Despite 2023 Subsidies

The Ministry of Energy and Mineral Resources (ESDM) reported that only 181 applications for the conversion of electric motorcycles from conventional gasoline-powered motorcycles were received throughout 2023. This number is significantly below the government's target of 50,000 units.

The Acting Director General of New, Renewable Energy and Energy Conservation (EBTKE) at the Ministry of ESDM, Jisman P. Hutajulu, stated that of the 181 applications, 145 received government assistance totaling Rp1.4 billion.

The details are as follows: eight converted motorcycles received Rp7 million in assistance or subsidies, while 137 others received Rp10 million subsidies.

Meanwhile, 36 applications are still undergoing roadworthiness tests and applications for the 2024 Type Test Letter (SUT) and Type Test Registration Certificate (SRUT).

"The realization of the electric conversion program, so there have been 181 applications completed conversion," said Jisman, as reported by *Katadata*, Thursday (18/1/2024).

The Ministry of ESDM has implemented various programs to improve the electric motorcycle conversion ecosystem through improvements to the electric motorcycle conversion regulations (ESDM Regulation Number 13 of 2023), including increasing incentives from Rp7 million to Rp10 million.

However, Jisman said that the total cost for the conversion could be above Rp10 million, namely between Rp15-17 million, so there is still a margin of around Rp5-7 million.

Therefore, according to Jisman, the Ministry of ESDM will communicate with banks so that the Rp5-7 million margin can be resolved, given a zero percent interest rate, and there is a way for motorcycle owners who want to convert without incurring costs.

He continued that other efforts to improve the electric motorcycle conversion ecosystem include preparing conversion workshops and conducting training/workshops. Currently, there are 28 conversion workshops certified by the Ministry of Transportation and 13 conversion workshops have joined a digital platform with a conversion capacity of 38,124 units per year.

Previously, the government targeted 50,000 motorcycles to participate in the conversion program in 2023. Then, the target of 150,000 units in 2024 was lowered to 50,000 units. Currently, the government has increased the subsidy for converted motorcycles from Rp7 million to Rp10 million.

The background of the government's program is a commitment to reducing greenhouse gas emissions by 31.8% by 2030, reducing fuel imports and government compensation, and saving fuel costs for the public.

In addition, the conversion program will have a positive impact on increasing electricity consumption by 15 gigawatt-hours (GWh), reducing emissions by 30,000 tons, and reducing fuel imports by 20,000 kiloliters, which directly saves the country's foreign exchange by US$10 million.