Indonesia Considers $320 Million in Incentives to Boost EV Sales

Indonesia is considering allocating 5 trillion rupiah ($434 million) from next year’s budget to incentivize electric vehicle (EV) purchases, though details of the scheme were still being finalized. Last week, Industry Minister Agus Gumiwang Kartasasmita said buyers could get a discount of 80 million rupiah for EVs made by firms with factories within the country, as well as other incentives for hybrid cars and electric motorcycles. The government plans to offer subsidies to sellers to cover the costs.

Airlangga Hartarto, Indonesia’s Chief Economics Minister, while speaking at a news conference said that authorities are detailing how much they could provide per sale based on the budget allocation. The government is also considering subsidizing electric bus sales, he added.

Related: Suzuki to Continue with APV in Indonesia… and Pakistan

According to Airlangga, Indonesia targets 20% of overall car sales in 2025 to be EVs. President Joko Widodo told the same news conference:

“We hope with these incentives, the electric motorcycle and electric car industry will grow”.

Companies that have invested or have announced planned investments in EV manufacturing in Indonesia include Toyota, Mitsubishi, and Hyundai. Indonesia has also tried to court US firm, Tesla, to invest to produce not just EV batteries but also cars in the country. Meanwhile SGMW Motor Indonesia, part of a joint venture of SAIC Motor, General Motors, and Wuling Motors Holdings, already has an EV assembly facility in the Southeast Asian country.

Related: Wuling Rolls Out Air EV in Indonesia

Japanese brands currently dominate sales in the world’s fourth most populous nation, with Toyota as the market leader. More than 942,000 cars were sold in the country from January to November this year, according to Reuters.

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