Indonesia Eased Subsidy Eligibility to Boost Electric Motorcycle Purchase

Indonesia's Ministry of Industry announced on August 29, 2023 that the electric motorcycle subsidy will be available to all Indonesian citizens aged 17 and over who hold an electronic ID card e KTP. The Ministry implement ed the Minister of Industry Regulation No. 6 of 2023 regarding electric motorcycle purchase subsidies on March 20, 2023 and started providing a flat subsidy of 7 million IDR per vehicle for the purchase of locally produced electric motorcycles with a local content rate of 40% or more. However, because the subsidies were limited to small businesses and low income earners, there were only 2,430 applications for subsidies as of August 29, more than five months after the system was introduced amounting to 1.2% of the 2023 subsidy allowance of 200,000 units. For this reason, eligibility for purchase subsi dy was eased in August.

As of September 1, 2023, there we re 30 models of electric motorcycles from 14 companies which were eligible for subsidies , with selling prices ranging from 12.59 million to 49.9 million IDR The cheapest product is PT. Roda Pasifik Mandiri s electric scooter Exo tic Sterrato, which costs 5.59 million IDR after subsidies The Exotic S terrato (see specs has similar performance to Honda s electric scooter EM1 e: m otor ’s rated output: 0.58 kW . b attery capacity: 1.3 k Wh . m aximum speed: 50 km/h . d riving range : 53 km but can be purchased at one fifth the price. The Honda BeAT, the most popular gasoline scooter in Indonesia, is priced between 18.05 million and 18.9 million IDR , more than three times m ore expensive than the Exotic Sterrato, but t here is a considerable difference in driving performance (fuel tank: 4.2 L. fuel efficiency: 58 km/L. maximum speed: 9 0 km/h. driving r ange: 244 km) The highest spec electric scooter among the subsidy eligible models is United E Motor s TX 3000 (see specs below)low), which has excellent driving performance, but the price after subsid ies is 42.9 million IDR , which is 24 million IDR higher compared to the Honda BeAT.

Sales of electric motorcycles in Indonesia are expected to increase as the eligibility for subsidies has been significantly relaxed. However, the price of Pertalite gasoline with an octane rating of 90 is 10,000 IDR L , the lowest in ASEAN, and there are strong concerns about electric motorcycles such as battery deterioration and short cruising range . For these reas ons, e xcluding commercial use where economic efficiency is important, demand for personal use may be limited. To promote the spread of electric motorcycles in I ndonesia , it will be necessary to accelerate the development of public charging infrastructure to increase the convenience of electric vehicles, and to introduce policies to alleviate user concerns, such as enhancing long te rm product warranties that include batteries.