EV Incentives to Enter into Force on March 20

Jayanty Nada Shofa
March 6, 2023 | 5:37 pm
SHARE
Potential buyers browse the electric motorbikes at the Tangkas showroom in South Tangerang on March 6, 2023. (Antara Photo/Muhammad Iqbal)
Potential buyers browse the electric motorbikes at the Tangkas showroom in South Tangerang on March 6, 2023. (Antara Photo/Muhammad Iqbal)

Jakarta. The Indonesian government on Monday announced that it would launch incentives for electric vehicles or EVs later this month.

"[The incentives] will come into effect on March 20. We have already reached the final stage," Chief Investment Minister Luhut Binsar Pandjaitan told reporters in Jakarta on Monday.

Luhut attributed the sluggish mass adoption of EVs in the country to the price gap between the low-emission vehicles and their traditional internal combustion engine (ICE)-based counterparts. The incentives are expected to narrow the price gap and eventually drive demand. 

According to Luhut, many countries, including Indonesia’s close neighbors, have already begun granting incentives to spur EV mass adoption and attract foreign investment. Indonesia needs to do the same to woo EV producers to invest in the country.

Advertisement

“We do not use the term ‘incentives’, but ‘government assistance’,” Luhut said.

“If the government assistance program goes well and Indonesia sees mass EV adoption, the domestic EV industry will take shape. Going forward, EVs will also become far more affordable,” he added.

The government revealed during the press conference that it would grant Rp 7 million ($457) in government assistance for 200,000 units of new electric motorbikes throughout 2023. The e-motorbikes, however, must be produced domestically and have at least 40 percent local content. 

The same amount of incentives will apply to the conversion of 50,000 conventional motorbikes.

About 138 buses and 35,900 electric cars will get the incentives this year. The government chose to announce the exact amount for the subsidies for electric cars or buses at a later time. 

To date, there are two EV producers in Indonesia that are eligible for the incentives, namely Hyundai and Wuling. Three electric motorbike producers Gesits, Volta, and Selis can also receive incentives once the regulation enters into force, according to Industry Minister Agus Gumiwang Kartasasmita.

“We are working on the general guidelines. So the Finance Ministry can allocate the budget for this EV government assistance,” Agus told the same presser.

Agus said the car dealers would first check the potential buyers’ ID cards to make sure they are entitled to the incentives. If eligible, the buyer will get a discount. The dealers will need to input the data, and later can claim the incentives from the members of the State-Owned Bank Association (Himbara). If the data matches, the Himbara banks will reimburse the incentives to the producers. 

“We are giving the incentives to the producers as this would make the monitoring much easier,” Agus said.

The prioritized buyers for the discounted EVs are the micro, small, and medium enterprises (MSMEs), particularly micro-loans and working capital aid beneficiaries, as well as families who subscribe to 450-900 volt-amperes (VA) of electricity.

A person can only receive the EV incentives once.

Read More:

Tags: Keywords:
SHARE

Related Articles


Business Jun 13, 2025 | 1:24 pm

Indonesia Prepares New Poverty Line Formula to Align with Global Standards

In April, the World Bank’s Macro Poverty Outlook reported that 60.3 percent of Indonesians lived below the poverty line in 2024.
Business Jun 12, 2025 | 2:53 pm

China-Led Investments to Offset Indonesia’s Recent Job Cuts, Luhut Says

Luhut says 67,000 new jobs could open by end-2025, fueled by Chinese-led factory projects in small towns despite current mass layoffs.
Business May 23, 2025 | 9:26 pm

Benzoin Resin Touted as Next Big Commodity in Indonesia’s Downstream Strategy

Luhut Pandjaitan says benzoin resin, or kemenyan, holds untapped potential for Indonesia’s downstream strategy and rural economic growth.
Business May 23, 2025 | 10:08 am

Luhut Proposes $1 Billion Joint Investment Between Indonesia’s Danantara and China’s Sovereign Wealth Entities

During a high-level meeting with Chinese Foreign Minister Wang Yi, Luhut proposed the creation of a joint sovereign wealth initiative.
Business May 12, 2025 | 12:50 pm

Indonesia Says Local Content Reforms Are Domestic-Driven, Not Response to US Tariffs

The USTR has cited Indonesia’s local content regulations as a trade barrier that prompted the reciprocal tariffs.
Business May 9, 2025 | 7:22 pm

VinFast to Invest $300M for 63,000 EV Charging Stations in Indonesia

VinFast and V-Green will invest $300M to build 63,000 EV charging stations across Indonesia by 2025.
Business Mar 25, 2025 | 7:26 pm

BYD’s 2024 Revenue Hits $107B, Surpasses Tesla’s Sales

BYD’s 2024 revenue hit $107B, surpassing Tesla’s $97.7B. Strong EV sales and a new fast-charging system fuel its global expansion.
Tech Mar 20, 2025 | 12:12 am

Prabowo to Launch GovTech Super App, Requiring Every Family to Have a Bank Account

“Based on our initial calculations, digitalization could save us Rp 100 trillion ($6 billion) in unnecessary spending,” Luhut said.
Business Mar 17, 2025 | 3:09 am

Ship Carrying 2,500 VinFast Electric Cars Arrives in Jakarta

This latest shipment marks VinFast’s fourth and largest delivery to Indonesia since it began expanding its reach to its neighbor last year.
Business Mar 12, 2025 | 8:42 pm

Government Forms Special Team to Review Regulations Hindering Investments

Luhut noted that several investment-related policies are considered unfavorable to investors and should be abolished or revised.

The Latest


News 5 hours ago

Iranian Missile Strikes Show Israel's Aerial Defense Array Is Not Ironclad

Too many projectiles launched at once can overwhelm the system, which relies on technology and human decision-making to be effective.
Business 5 hours ago

Russia Ready to Boost Oil Supplies to Indonesia, Putin Tells Prabowo

Putin tells Prabowo that Russia is ready to ramp up oil and LNG supplies to Indonesia.
Business 5 hours ago

Indonesia’s Bumi Resources to Acquire Australian Gold and Copper Miner Wolfram Limited

The acquisition is Bumi's strategic move to expand into critical minerals amid growing global demand for green energy transition metals.
Business 6 hours ago

Morowali Industrial Park Pledges Reforms After Environmental Warning from Minister

Despite the setback, Dedy stressed that IMIP uses advanced technology to reduce emissions from its nickel smelters.
Business 7 hours ago

Russia's Economy Minister Says the Country Is on 'The Brink of Recession'

High defense spending has propelled growth and kept unemployment low in Russia despite fueling inflation.
COPYRIGHT © 2025 JAKARTA GLOBE. ALL RIGHTS RESERVED