With a Potential Subsidy of Rp7 Million per Unit, How Many Electric Motorcycles Will Be Sold in Indonesia?

Electric vehicle subsidies, including those for electric motorcycles, will be disbursed on March 20, 2023. However, this assistance will only be available for specific brands.

According to *Katadata*, the subsidized electric motorcycle brands are Gesits, Volta, and Selis. Agus Gumiwang Kartasasmita, the Minister of Industry, stated that the subsidy will only be applicable to one National Identity Number (NIK).

"This assistance is only valid for one purchase, so one NIK cannot buy and then resell it," said the Minister of Industry, Agus Gumiwang Kartasasmita, at a press conference in Jakarta on Monday (March 6, 2023).

Meanwhile, the Head of the Fiscal Policy Agency, Febrio Nathan Kacaribu, explained that the Rp7 million subsidy targets two types of motorcycles: new electric motorcycles and the conversion of conventional motorcycles to electric ones. Both receive the same amount of assistance.

"Electric motorcycles receiving government assistance are those produced in Indonesia with a Domestic Component Level (TKDN) of 40% or more," said Febrio at a press conference on Monday (March 6, 2023). Febrio emphasized that electric motorcycle manufacturers are also prohibited from raising their selling prices during the program.

The subsidy quota is allocated for 200,000 new battery-based electric motorcycles and 50,000 converted electric motorcycles. This quota is valid until December 2023.

Priority recipients of this subsidy are micro, small, and medium enterprises (MSMEs). Specifically, MSMEs participating in the People's Business Credit (KUR) and Micro Business Productive Assistance (BPUM) programs. Recipients of 450-900 volt-ampere (VA) electricity assistance are also included.

So, how are electric motorcycle sales in Indonesia?

The Indonesian Motorcycle Industry Association (AISI) states that electric motorcycle sales in Indonesia have not been very encouraging.

Data compiled by AISI shows 31,827 electric motorcycles sold in October 2022. These figures are based on the Type Test Registration Certification (SRUT) issued by the Ministry of Transportation.

President Joko Widodo himself targets the production of 2 million electric motorcycles by 2025.

AISI also notes that at least 35 companies involved in the production and sales of electric motorcycles had emerged by November 2022. However, this is disproportionate to the sales figures, which remain around 31,000 units.

"This is because the public is still hesitant about electric vehicles, both in terms of battery durability and the price, which is considered relatively more expensive than internal combustion engine-based vehicles," AISI wrote on its official website.