Indonesia's Business Group Urges Local Focus for Electric Motorcycle Project

The Indonesian Employers Association (Apindo) has called for the national electric motorcycle project to prioritize domestic industries to ensure it positively impacts the country's economy. Apindo's economic policy analyst, Ajib Hamdani, expressed concern that the project might simply be a "re-stamping" of foreign products rather than a genuine domestic initiative.

"What needs further consideration is whether this national electric motorcycle concept is truly a domestic product, or just a re-stamping of foreign products," Hamdani stated. He emphasized that for the project to benefit the economy, key components like the chassis, body, and wiring must have a local component content (TKDN) exceeding 50 percent. He also highlighted the importance of involving local cooperatives in the supply chain.

Apindo projects three main positive economic impacts if the electric motorcycle initiative succeeds. Firstly, it would align the design with the needs and usage patterns of Indonesian motorcyclists, creating a productive economic tool. Secondly, it aims for an emissions reduction of over 95 percent. Thirdly, it is expected to significantly reduce the fiscal burden of fuel subsidies, given that Indonesia has over 145 million motorcycles, with the government spending over 500 billion rupiah daily on Pertalite subsidies for them.

Hamdani sees the project as a potential catalyst for re-industrialization, especially as Indonesia's manufacturing sector's contribution to GDP has fallen to around 19.2 percent, hindering job creation and value addition. He contrasted this with Vietnam, where supportive regulations and low operating costs have boosted the manufacturing sector's GDP contribution to over 23 percent, leading to substantial job growth.

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What needs further consideration is whether this national electric motorcycle concept is truly a domestic product, or just a re-stamping of foreign products.