Coordinating Minister for Maritime Affairs and Investment Airlangga revealed that the budget for electric vehicle incentives has been prepared.

Coordinating Minister for the Economy Airlangga Hartarto. (Photo: ANTARA)

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the government has allocated a budget for the provision of incentives for electric vehicles (electric vehicles/EV).

Airlangga explained that discussions on the amount of incentives were still ongoing with the relevant technical ministries, and it was only a matter of determining the mechanism for launching it.

"We will monitor the EV stimulus later, because the plan is there is a plan to develop or manufacture a national electric motor. This is still under discussion between technical ministries and the budget is there, it's just how we launch it," he said in a press conference, quoted Thursday, August 6.

Airlangga said that the incentive is expected to increase the production capacity of electric vehicles in the country as well as strengthen the Domestic Component Level (TKDN).

In addition, he added that the government is also preparing a comprehensive electric vehicle ecosystem, including the development of the battery industry.

According to Airlangga, batteries are the component with the largest contribution to the local content because they account for about 60 percent of the total production cost of electric vehicles and currently, the government is still studying the scheme to be applied, whether using a swap battery system or a battery that is directly integrated with the vehicle.

Previously, Finance Minister Purbaya Yudhi Sadewa said President Prabowo Subianto would announce the policy in the near future.

According to him, the EV stimulus includes support for around 500,000 electric motorcycles as well as incentives for electric cars.

"I think in two or three weeks from now the President will launch a stimulus for EVs, including 500,000 motorcycles and electric cars, there is a 100 percent exemption for luxury goods, VIPs, paid for by the government and 40 percent for certain electric vehicles," he said. in the Gaikindo International Automotive Conference, Tuesday, August 4.

However, Purbaya did not explain in detail the incentive scheme that was being prepared and asked the public to wait for an official announcement from the president because the government was still finalizing the stimulus mechanism.

"I forgot the details (about the details of the VAT incentive) Later the President will announce it," he said.

Purbaya emphasized that based on the scheme currently known to the government, the stimulus is specifically aimed at electric vehicles and does not include hybrid or plug-in hybrid cars.

"I haven't heard of that plan, what I hear is that the plan is only EV, battery nickel-based and battery lithium-based are also slightly different," he said.

According to Purbaya, the provision of electric vehicle stimulus is part of the government's strategy in responding to increasing global geopolitical uncertainty, including the prolonged conflict in the Middle East region.

He added that the geopolitical conditions are considered to have the potential to keep world oil prices high for a long time, so the government encourages the acceleration of the adoption of electric vehicles to reduce Indonesia's dependence on fuel oil imports (BBM).

"So we have to adapt. My government and Mr. Prabowo want to reduce our dependence on oil imports very significantly, which is why we are promoting electric vehicles," he explained.