Observer: Electric motorcycle subsidy to boost national industry

Energy Shift Institute Managing Director Putra Adhiguna has said the government’s electric motorcycle purchase incentive policy could strengthen the national electric vehicle industry in the long term.

Putra said the government needs to ensure the Rp3 million per unit incentive can help consumers switch from conventional motorcycles and have an impact on the domestic industry.

“However, be wary that it does not trigger a wave of imports and limited, short-lived assembly operations that do not genuinely build the industry,” Putra told ANTARA in Jakarta on Monday.

He said the government also needs to evaluate the success of previous subsidies and set clear benchmarks for manufacturers that should receive support.

According to him, this is important so that the incentive does not merely boost sales but also strengthens production capacity, supply chains, and the use of domestic components.

Putra said current national production capacity is still considered capable of meeting market demand, with electric motorcycle sales at around 70,000 units per year.

“Production capacity should be able to meet demand, provided there is consistent government support and clear, sound standards,” he said.

Putra said government incentives also need to consider consumer purchasing power, particularly among the middle and lower classes amid current economic conditions.

Therefore, the subsidy design needs to be better targeted by considering user needs, such as vehicle reliability, range, and the readiness of charging and battery swapping infrastructure, which are important factors in building sustainable demand.

He also reminded the government to maintain quality standards for motorcycles and batteries as an effort to preserve public trust in electric vehicles.

In the long term, Putra said the development of the electric vehicle ecosystem also needs to consider the impact of nickel downstreaming on selling prices so that products remain affordable for consumers.

As previously reported, Finance Minister Purbaya Yudhi Sadewa said the electric motorcycle subsidy incentive policy could take effect as early as September 2026.

Purbaya revealed that the incentive for electric motorcycle purchases is targeted at Rp3 million per unit, with a target of 1 million units. The total budget prepared amounts to Rp3 trillion.