Reasons Why Finance Minister Purbaya Seeks Incentives for Electric Vehicles

The government has confirmed it will reinstate incentives for purchasing electric cars and motorcycles in fiscal year 2026 under various schemes. Targeted to commence in early June 2026, Finance Minister Purbaya Yudhi Sadewa stated that this policy is being prepared to sustain economic growth while hastening the transition from petroleum fuel (BBM) to electric energy. “To provide an additional boost to the economy in the second quarter, and crucially, to facilitate the switch from BBM to electricity. This will reduce our BBM imports and also bolster our economic resilience,” Purbaya said during a press conference of the Financial System Stability Committee (KSSK) on Thursday (7/5/2026). According to him, discussions on electric vehicle incentives have been held with the Coordinating Ministry for Economic Affairs and the Ministry of Industry. Currently, the government is still calculating the required budget. Previously, Purbaya explained that the government is preparing an initial quota of 100,000 units each for electric cars and motorcycles. For electric motorcycles, the subsidy provided is Rp 5 million per unit. Meanwhile, electric cars will receive incentives in the form of Government-Borne Value Added Tax (PPN DTP). The amount of PPN DTP for electric cars is said to range from 40 percent to 100 percent, depending on the type of battery used in the vehicle. “Those with nickel-based and non-nickel batteries will have different schemes,” Purbaya said. In line with these new incentive plans, the electric vehicle market in Indonesia continues to show a positive growth trend. Based on data from the Indonesian Automotive Industry Association (Gaikindo), battery electric vehicle sales in the first quarter of 2026 reached 33,150 units. This figure represents a 95.9 percent increase compared to the same period last year, which recorded 16,926 units.