Volta, Selis and Gesits, the three electric two-wheeler producers eligible to sell their products under the subsidy program, project double-digit increases in sales this year, which is likely to require them to boost their production capacity.

Wilson Teoh, director of PT Juara Bike, which produces EV bikes under the Selis brand, expects sales this year to be about 40 percent higher than they would have been without the financial assistance, while consolidated revenue may exceed Rp 700 billion (US$45.5 million).

Taking into account the effect of the subsidy set to be made available later this month, the company now aims to sell around 60,000 electric two-wheelers this year, namely 20,000 motorcycles and 40,000 e-bikes.

“With this subsidy, our sales and revenue can still rise significantly,” Wilson told reporters in Jakarta on Friday.

Read also: Govt earmarks Rp 1.75t for electric two-wheelers 'assistance'

The assistance will come in the form of subsidies, amounting to Rp 7 million for each purchase or conversion, but only for two-wheelers produced in compliance with the local content requirement (TKDN), which means at least 40 percent of the value of the components must come from Indonesia.

The government has earmarked Rp 1.75 trillion for this support, which could cover subsidies on 200,000 newly purchased vehicles and the conversion of 50,000 vehicles to electric ones between March 20 and Dec. 31.

The subsidy comes amid the government’s effort to push EV adoption in the country, which currently remains sluggish due to the relatively high prices of EVs when compared with most conventional vehicles and the lack of charging infrastructure.

With the current pace, only a fraction of conventional motorcycles could be replaced by electric ones over the coming years, analysts say.

Wilson went on to say that Selis planned to introduce extra shifts at its production facility,

Currently, the company is still operating with a single shift, which has a capacity to produce 12,000 two-wheelers a month, 3,000 of which are motorcycles.

One new production line would cost Selis US$500,000, which Wilson considers not too steep and the increase can be done easily according to demand. Alternatively, the company may shift the capacity from other two-wheeler products to step up motorcycle manufacturing instead, he said.

Similarly, Iwan Suryaputra, CEO of Volta Indonesia Semesta said on Friday that was likely there would be a surge in demand for electric two-wheelers following the subsidy, but he was unable to reveal any projections as yet.

“Without the subsidy, we [had projected] to sell between 50,000 and 60,000 electric motorcycles this year, but with the subsidy, that number may be wrong,” Iwan told reporters in Jakarta.

Currently, Volta operates one production shift with a capacity of 100,000 units annually, but the subsidy would make it possible for the company to increase its production capacity, he said.

“To anticipate a surge in demand, we can run three shifts,” Iwan said. “If [output then] is still lacking, we can collaborate with other manufacturers to add more production lines,” he added.

Read also: Only fraction of RI motorbike fleet seen to be electric by 2030

Meanwhile, Bernardi Djumiril, president director of WIKA Industri Manufaktur, the firm that owns the Gesits brand, said the company, a subsidiary of state-owned construction firm WIKA, would take things slowly but would watch carefully how big a surge in sales might occur.

Roughly 2,000 Gesits bikes were sold last year, but the company said it may be more this year, which would prompt it to expand its production capacity.

Bernardi added that the company aimed to have a production capacity of 35,000 to 50,000 vehicles this year, significantly higher than its capacity of around 10,000 units targeted last year.