Analyst: Incentives a Strategic Step in Electric Vehicle Development

Jakarta (ANTARA) - Public policy analyst Agus Pambagio is urging the government to introduce more comprehensive regulations for the development of electric vehicles (EVs) amid global energy price pressures, in order to reduce dependence on petroleum fuels (BBM).

“EV incentives are still considered important as a strategic step. From an operational perspective, electric vehicles offer significant cost efficiencies,” he said in his statement in Jakarta on Wednesday.

With incentives, he continued, energy expenditure for EVs is said to be only hundreds of thousands of rupiah per month, far cheaper than conventional fuel-powered vehicles (internal combustion engine/ICE), which can reach millions of rupiah.

He noted that energy subsidies have consistently increased since 2020, from Rp95.7 trillion to Rp159.6 trillion in 2023, mainly for BBM and LPG. In 2024, it rose to Rp203.4 trillion, then in 2025, the total subsidies and compensations reached Rp394.3 trillion, while the 2026 RAPBN allocates Rp210.06 trillion.

Nevertheless, Agus warned that energy transition policies must not be implemented partially; therefore, the EV incentive scheme needs refinement to be more targeted.

One proposed option is linking EV purchases with a trade-in mechanism for old petroleum-fuelled vehicles.

Overall, he emphasised that EV policies must be designed comprehensively so that the energy transition does not merely add to the number of vehicles but truly reduces dependence on fossil energy.

Previously, the Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, affirmed that the high energy consumption, especially from fossil sources, is pushing the government to seriously accelerate the development of the national electric vehicle ecosystem as a step towards clean energy transition.

He mentioned that these efforts are being carried out through industry strengthening, provision of supporting infrastructure, and the provision of incentives to expand EV adoption in an integrated manner while enhancing energy independence.

The government, he added, is preparing various facilitations and incentives to accelerate the implementation of the programme in line with the established targets.