Indonesia reduces electric motorcycle incentives to Rp3 million per unit

The Indonesian government has adjusted its electric motorcycle incentive program, reducing the subsidy from Rp5 million to Rp3 million per unit. Finance Minister Purbaya Yudhi Sadewa confirmed that a total budget of Rp3 trillion has been allocated to support a quota of one million electric motorcycle units produced domestically.

Despite the high production capacity of the 69 existing companies in the two- and three-wheeled electric vehicle sector, officials expect slow absorption. Purbaya noted that the target of one million units is unlikely to be met by the end of 2026, with actual absorption potentially reaching only around 100,000 units due to current production limitations. The government is considering further steps, including the possibility of increasing the subsidy amount.

Simultaneously, the Ministry of Industry is supporting the national electric motorcycle initiative by integrating small and medium industries (IKM) into the supply chain. Through supplier development schemes, local companies such as PT Kannino Metal Industri and PT Multikon Rekatama Industri are already producing components like battery boxes and brackets for brands like Alva. The ministry aims to ensure these smaller enterprises meet industrial standards to secure sustainable orders within the larger EV ecosystem.