Indonesia to Provide Incentives to Boost Electric Vehicle Sales

Starting from March 20, Indonesia will offer incentives to increase electric vehicle (EV) sales as part of attempts to speed adoption and attract investment from major EV manufacturers such as Tesla and BYD.

The incentive package, according to Industry Minister Agus Gumiwang Kartasasmita, will cover the sales of 200,000 electric motorbikes and 35,900 electric vehicles, as well as the conversion of 50,000 combustion engine motorcycles. The Industry Minister along with Cabinet Minister Luhut Pandjaitan, while speaking at a news conference, said 7 million rupiah ($457.82) will be disbursed to producers and retailers for each new motorcycle sold and for each converted into an electric bike.

Indonesia is keen to develop domestic EV production facilities to take advantage of its rich nickel reserves, an important material to produce batteries. Luhut said:

“We are finalizing negotiations with two big global car producers. We hope this new policy will make our position much stronger than before. If we don’t give (incentives), they will not come to us.”

Indonesian officials have been trying to attract investment from key electric car makers such as Tesla and China’s BYD. On the other hand, South Korea’s LG and Hyundai have already started construction on plants to assemble batteries and electric cars in the country. Agus highlighted that companies eligible to join the incentive program are required to have a plant in Indonesia and meet certain local content requirements.

Source: Reuters

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