IDR 7 million rebate on every electric motorcycle purchase

The government will provide an incentive of Rp 7 million per electric motorcycle for 200,000 units in 2023. This was announced by the Head of Fiscal Policy Agency (BKF) Febrio N. Kacaribu during a press conference on Battery-Based Electric Vehicles (KLBB) on Monday, March 6, 2023. "Qualified electric motorcycles will receive incentives and must be produced in Indonesia with a domestic content level (TKDN) of 40% or more," explained Febrio.

Industry Minister Agus Gumiwang Kartasasmita revealed that the program will encourage the sale of 200,000 electric motorcycles, 35,900 electric cars, and the conversion of 50,000 motorcycles with internal combustion engines to electric. This move is part of Indonesia's efforts to develop its domestic electric vehicle manufacturing capacity, which is crucial as the country has abundant reserves of nickel, a key component in battery production.

The Indonesian government is currently in negotiations with major electric vehicle manufacturers, including Tesla, to develop and expand the country's EV market. This program is expected to benefit both consumers and the local industry, while also contributing to the country's transition towards cleaner and more sustainable modes of transportation.

Incentives to attract more investment

Indonesia is set to launch a new initiative on March 20 that will incentivize the purchase of electric vehicles. The aim is to speed up the adoption of these environmentally friendly vehicles and attract investments from major companies like Tesla, according to Senior Cabinet Minister Luhut Pandjaitan.

According to Senior Cabinet Minister Luhut Pandjaitan, the Indonesian government is in the final stages of negotiations with two major global car producers. While he did not reveal the names of the companies, he stated that the new policy to incentivize the purchase of electric vehicles will strengthen Indonesia's position in the negotiations.

Luhut also emphasized the importance of providing incentives to these companies in order to attract them to Indonesia. "If we don't give [incentives], they will not come to us," he said.

The Indonesian government's efforts to encourage the development of its domestic electric vehicle manufacturing capacity, combined with its abundant reserves of nickel, a key component in battery production, make the country an attractive destination for electric vehicle manufacturers. With this new policy, Indonesia hopes to further boost its position as a key player in the global electric vehicle industry.

Opportunities for importers/online seller

Not long after the good news appeared, many speculators trying to import EVs particularly the motorcycle. I found one of seller on Tokopedia that sell EVs below IDR 1 million after the rebate prices. But please mind that the initiatives must be produced in Indonesia with a domestic content level (TKDN) of 40% or more.