Starting March 20, the Government Provides Electric Vehicle Incentives

The Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan said the government would start providing subsidies or incentives for the purchase of battery-based electric motorized vehicles (KBLBB), namely motorbikes and electric cars on March 20 2023. Providing KBLBB incentives is considered a first step to increasing the affordability of prices and people’s purchasing power for electric vehicles.

“Stimulating the development of the new energy automotive industry. We will start implementing (incentives) effectively on March 20, 2023,” said Luhut in Jakarta, Monday (6/3).

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. (Photo: Courtesy/Presidential Secretariat Bureau)

According to Luhut, the incentives also aim to accelerate the KBLBB industry in Indonesia. This acceleration is in the context of encouraging efficiency in energy security, realizing clean air quality, and being environmentally friendly.

“The most important thing is to reduce our dependence on imported fuel oil (BBM). This is in line with Indonesia’s commitment to reducing greenhouse gas emissions,” he said.

One of the Gojek riders Ismail spoke with the President about the convenience of driving an electric motorbike. (Photo: Courtesy/Presidential Secretariat Bureau)

The policy of providing incentives for purchasing KBLBB is actually a follow-up to Presidential Regulation No. 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motorized Vehicle Program. Nevertheless, said Luhut, production and sales of KBLBB in Indonesia have not been able to proceed quickly.

“As stated in the Presidential Decree, it is stated that the acceleration of the KBLBB program is driven by reasons of increasing energy efficiency,” he said.

Then, Luhut explained that the mass adoption of electric vehicles was a crucial factor in creating this ambition. However, mass adoption has not been able to move quickly because there is still a significant price difference for environmentally friendly electric vehicles compared to conventional vehicles.

“Thus hindering people’s ability to transact in terms of adopting electric vehicles,” he explained.

Minister of Industry Agus Gumiwang Kartasasmita said the government will provide incentives for buyers of electric vehicles produced in Indonesia (Presidential Secretariat Bureau)

Minister of Industry Agus Gumiwang Kartasasmita revealed that the government will provide incentives for the purchase of electric motors of IDR 7 million per unit.

“In 2023 we propose to provide government assistance for the purchase of 200 thousand units of EV (electric vehicle) motorcycles by December 2023,” he said.

Meanwhile, incentives for four-wheeled vehicles or cars provided by the government until December 2023 amount to 35,900 units. However, Agus did not disclose the amount of incentives for four-wheeled electric vehicles.

“As for (incentives) for buses, we are proposing a total of 138 units by December 2023,” he said.

Transportation observer Djoko Setijowarno said the policy of providing incentives for electric vehicles was ironic and ridiculous. This is because it is better to divert incentives for electric vehicles to improve public transportation.

“That’s an ironic and ridiculous policy. The (incentive) money should have been used to improve public transportation in the regions,” he said when contacted by VOA.

Djoko assessed that the policy of providing incentives for electric vehicles could also cause new problems such as traffic jams and accidents. Not only that, the policy of providing electric vehicle incentives also has the opportunity and provides loopholes for criminal acts of corruption.

“That (could be) a new model of corruption. The Corruption Eradication Commission (KPK) must oversee this,” he concluded.

For this reason, he calls on these policies to be reviewed to suit the needs and vision of Indonesia’s transportation in the future. [aa/ah]