JAKARTA: The war-driven oil price shock has exposed Indonesia’s dependence on imported fuel and strengthens the case for electrifying transportation, but experts say a plan to convert millions of petrol motorcycles to electric may be the wrong tool for the job.
The government is reviving a programme to retrofit existing motorcycles with electric engines as it seeks to curb fuel consumption and reduce energy subsidies at a time when global oil markets are rattled by the closure of the Strait of Hormuz amid the US-Israel war on Iran.
In early March, President Prabowo Subianto appointed Energy and Mineral Resources Minister Bahlil Lahadalia to head an energy transition task force tasked with converting up to 120 million motorcycles within three to four years and generating an additional 100GW of solar power.
Bahlil said last week that the government would provide “sweeteners”, adding that the state would shoulder part of the cost when owners convert their two-wheelers to electric ones.
Electrification is the right policy direction for reducing fuel consumption, but encouraging consumers to buy new electric motorcycles would likely yield faster results than converting existing ones.
This is given that the programme clashed with economic realities, said Yannes Pasaribu, an automotive industry expert at the Bandung Institute of Technology.
“Policies (that encourage) buying a new electric motorcycle make more sense for consumers ready for electric vehicles.
“This aligns with the fact that the conversion programme delivered very limited results (in the past),” Yannes told The Jakarta Post.
Indonesia first rolled out the motorcycle conversion programme under President Joko Widodo in 2023, targeting the replacement of 50,000 engines that year and 150,000 in 2024. Yet only about 1,500 vehicles were converted, merely 1% of the target.
The scheme struggled to gain traction as high costs and limited certified workshops deterred owners, with conversions costing up to 17 million rupiah (US$1,000), according to the energy ministry’s website, close to the price of entry-level electric two-wheelers.
“These numbers show that the problem is not a lack of public awareness. There is a mismatch between the policy and the realities on the ground,” said Yannes.
Conversions also required testing, certification and registration changes, while thin financing options, patchy charging infrastructure and delays in government subsidy payments strained participating workshops, he noted. — The Jakarta Post/ANN
