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EVs purchase subsidy scheme needs priority adjustment, experts warn
Incentives allocation to boost the adoption of electric vehicles (EVs) must focus on the types of vehicles that dominate the population in Indonesia, considering the country’s limited fiscal capacity.
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Green car: An official charges an electric car on Friday after the launch of the first public electric vehicle (EV) charging station, which was used for EVs transporting world leaders during the Group of 20 Summit in Nusa Dua, Bali, in November. (AFP/Sonny Tumbelaka)
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ncentives allocation to boost the adoption of electric vehicles (EVs) must focus on the types of vehicles that dominate the population in Indonesia, experts warn, considering the country’s limited fiscal capacity.
Institute for Essential Services Reform (IESR) has pointed out that, since the cost of an electric car averaged roughly above Rp 700 million (US$44,871.88), the incentive, which amounted to Rp 80 million, would put the price of such vehicles at around Rp 600 million.
However, the number of Indonesians who possess internal combustion engine (ICE) cars costing more than Rp 500 million is only 1 percent of the entire vehicle population.
“Moreover, considering [Indonesia’s] limited fiscal capacity, the moment is not right to incentivize electric four-wheelers, especially private vehicles,” IESR executive director Fabby Tumiwa said on Monday, Dec.18.
He, nonetheless, encouraged the government to provide incentives for electric two-wheelers as the majority of the Indonesian population are motorbike users, which, according to his estimates, at around 120 million units, accounted for a share of about 50 percent of the total registered-vehicle population across the country.
Motorbikes dominate the registered-vehicle population in Indonesia in 2020 with a total of 115 million units, making up 84.49 percent of the population of 136 million units, the Statistics Indonesia (BPS) data show.
Passenger cars, freight cars and buses followed with 15.79 million units, 5.08 million units and 233,000 units, respectively.
