PIKIRAN RAKYAT - The Indonesian government will provide incentives for the sale of electric vehicles starting March 20 to accelerate green energy shifts from fuel to electric. The incentives will hopefully attract investment into EV production at home, senior cabinet minister Luhut Pandjaitan told the media on March 6, 2023.

The program will cover sales of 250.000 EVs, a total of 200.000 EV motorcycles, and 50.000 EV cars. "The government will offer Rp7 million in incentives for every EV motorcycle purchase, for a total of 200.000 units this year of 2023," said Chief of Ministry of Finance Fiscal Policy Fabio Nathan Kacaribu on a press conference.

Furthermore, he explained that the incentives will only cover those EVs produced domestically in Indonesia with domestic components at least 40 percent of the time. He also warned the manufacturer not to increase the selling price during the program.

He also clarified the target for the incentives. He said the government will target those who run small and medium enterprises (UMKM), the recipients of KUR (People’s Business Credit), and the recipients of microbusiness productive assistance.

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"The incentive will encourage the use of EV motorbikes, hence boosting the productivity and efficiency of a small enterprise," he stated.

On the other hand, the government also issues incentives for EV cars. A subsidy of around 80 million rupiahs ($5,131) will be offered on every sale of an electric car, 40 million rupiahs on hybrid cars, and 8 million rupiahs on fully electric motorbikes, the minister said.

Earlier on February 20, 2023, President Joko Widodo confirmed that his administration will subsidize the purchase of EVs.

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President Joko Widodo's announcement of a Rs 7 trillion stimulus package for electric vehicle purchases is an attempt by the government to accelerate the electrification of the country.

In addition to promoting the development of the electric vehicle industry in Indonesia, the President believes that government tax revenue will have a fairly significant multiplier effect, starting with higher taxes, increasing government non-tax revenue (PNBP), and expanding employment opportunities.

In addition to privately owned electric cars, the government also plans to consider incentives for electric buses and other public transportation. It is also required that the incentive be applied only to domestically assembled vehicles.***