Electric-Vehicle Incentives Under Review, Purbaya Calculates Deficit as Bahlil Pushes for Motorcycle Conversions
Indonesia’s government is still calculating the possibility of reintroducing electric-vehicle incentives amid global economic uncertainty. The policy is seen as potentially widening the budget deficit and thus needs to be considered carefully.
Finance Minister Purbaya Yudhi Sadewa said the government has not yet decided on electric-vehicle incentives. According to him, the move depends heavily on the country’s fiscal position.
‘It could happen. But the deficit would widen. So we first calculate how much room there is under the deficit cap,’ Purbaya said in a discussion with reporters at a breaking-of-fast event at the Finance Ministry, Jakarta, Friday (6 March 2026).
He explained that pressure on the national budget is currently substantial, particularly from the potential rise in energy prices due to the geopolitical conflict in the Middle East. In addition, a slowdown in exports is another factor to be considered.
‘We must be cautious because there is also pressure from fuel. Exports may also be disrupted. So we first calculate how big the impact would be on the deficit,’ he said.
According to Purbaya, if the impact on the deficit is not too large, the government could still consider granting the incentives. ‘If it is not too big, we can compare and it could be done,’ he said.
The Ministry of Finance is also monitoring global oil-price movements that could affect fiscal conditions. The government is preparing several scenarios to anticipate the impact of global conflicts on energy prices.
Purbaya explained that the moderate scenario estimates oil prices at around $72 per barrel and is still considered safe for the national budget. However, in the worst-case scenario, oil prices could rise to $92 per barrel. ‘If $72 is still safe and controllable. The worst-case could reach $92,’ he said.
Nevertheless, the government does not plan to change budget assumptions in the near term. Purbaya said the government will monitor global developments over the coming months.
‘In the next three months we will see. Usually when there is a price war prices rise, but after the situation eases they can fall sharply again,’ he said.
He argued that fundamentally global oil supply remains ample, so price increases are unlikely to last long. Some producing countries are also expected to add energy supply. ‘If you look at the fundamentals, prices should fall again because supply is ample,’ said Purbaya.
On the other hand, the prospect of electric-vehicle incentives has indeed become a focus for the automotive industry. In recent years, incentive policies have been seen as contributing to the growing use of electric cars in Indonesia.
The Ministry of Industry stated that the policy for electric-car incentives for 2026 is still under discussion. Setia Diarta, Director General of the Industry of Metal, Machinery, Transportation Equipment, and Electronics at the Ministry of Industry, said the government is still finalising the policy.
‘M still under discussion. Hopefully it will be decided soon,’ Setia said at the Indonesia International Motor Show (IIMS) 2026 in Jakarta.
However, Minister of Industry Agus Gumiwang Kartasasmita previously confirmed that the government would not provide incentives for electric motorcycles in 2026. The policy is being considered by evaluating the country’s fiscal capacity. ‘Our considerations look at the fiscal strength and its benefits for the overall economy,’ Agus said.