JAKARTA: The domestic electric vehicle (EV) industry has raised concerns that the government’s flip-flopping over incentives for electric two-wheeler purchases is choking sales, as consumers hold off on buying and dealers face the risk of shutting down.
Business players had been waiting for the three trillion rupiah incentive to come into effect, which would give buyers three million rupiah off each locally made electric motorcycle, for up to 100,000 units.
The programme was expected to be implemented earlier this year, with the government changing the timeline several times, but it has yet to provide certainty over when the incentive would be disbursed to date.
“The government should not hesitate to provide the incentive. Why is this going back and forth, with us still waiting for when it will actually be implemented?” Moeldoko, chairman of Indonesian Electric Vehicle Industry Association told a House of Representatives hearing on Monday.
“As a result, all our dealers and manufacturers are stuck with stagnant sales now. many dealers could go out of business.”
Moeldoko, presidential chief of staff under former president Joko “Jokowi” Widodo, argued the government should view incentives not just as a cost to the state but as a tool to accelerate the shift away from petrol-powered vehicles.
Wider EV adoption could cut the government’s fuel subsidy burden while lowering mobility costs for consumers via fuel savings and operating expenses and improving air quality, he said.
But repeated promises to extend the incentive without actually implementing it have left businesses without the certainty they need to plan, he added.
Moeldoko urged lawmakers to push the government to provide greater certainty rather than repeatedly extending or reconsidering the incentive programme on an annual basis. “The policy is only for one year,” he said.
“The following year there is another promise, waiting, and it still has not come down. This does not provide certainty for industry players.”
Indonesia had about 145 million motorcycles on the road in 2025, according to Statistics Indonesia, with annual sales averaging around six million units.
By comparison, only about 229,000 electric motorcycles were on the road last year, leaving electric two-wheelers with a small share of the overall market.
The industry’s sales performance suggests the incentive has had a material effect on demand. Sales accelerated after the government introduced a purchase incentive, reaching 77,000 units in 2024. — The Jakarta Post/ANN
