Indonesia links EV incentives to national car project

Indonesia's government is set to align electric vehicle (EV) incentives with a broader national strategy to develop domestic car and motorcycle projects. Coordinating Minister for Economic Affairs Airlangga Hartarto announced on Monday that the government is focusing on integrating direct consumer subsidies with national manufacturing targets. This move is expected to foster a more robust upstream-to-downstream EV ecosystem.

"We will see whether this is linked to the national car program or the national motorcycle program," Hartarto stated. The government is currently evaluating incentive structures to simultaneously increase consumer demand and bolster the domestic EV supply chain. However, specific details on the final format and implementation timeline remain under discussion.

This policy push supports wider government targets, with Finance Minister Purbaya Yudhi Sadewa previously aiming for annual sales of 100,000 electric cars and 100,000 electric motorcycles. Proposed incentives include an estimated Rp5 million (approximately $310 USD) per unit for electric motorcycles, while car subsidies are still being assessed.

The initiative comes amid significant growth in Indonesia's green mobility sector. Battery electric vehicle (BEV) sales surged 95.9 percent year-on-year in the first quarter of 2026, reaching 33,150 units, according to the Association of Indonesia Automotive Industries (Gaikindo). Electric motorcycles continue to dominate the Indonesian EV landscape, with registered units reaching 236,451 by February 2026, representing about 65 percent of all EVs on the road.

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We will see whether this is linked to the national car program or the national motorcycle program.