Minister of Industry Signals Motor and Electric Car Incentives, Here's the Explanation

Minister of Industry Agus Gumiwang Kartasasmita (Photo: VOI doc)

JAKARTA - Minister of Industry (Menperin) Agus Gumiwang Kartasasmita revealed that the government is considering providing subsidies for the purchase of all models of electric vehicles or electric vehicles (EV), both electric motorcycles and electric cars.

"We are still talking (about giving incentives) for motor (electric). (But) everything must be, everything will be based on electric vehicles," Agus told reporters in Jakarta, Tuesday, April 28.

According to him, the policy will be taken into account considering President Prabowo Subianto's direction regarding national energy security as a result of the conflict in the Middle East.

The conflict taking place in the Middle East has also disrupted the trading activity of energy commodities in the Strait of Hormuz, especially the world's crude oil. According to Agus, this is a benchmark that Indonesia must immediately switch to vehicles based on new and renewable energy sources, such as EVs.

"Because once again when we design the EV program, right, we are still using the approach of reducing emissions, that is also important. But now with the experience we have faced (the Strait of Hormuz tension), so it must also be linked and perhaps more important to energy resilience," he said.

"So, energy resilience reduces our dependence on imported fuel," he said.

Agus said that for now, the government is still focusing on formulating policies to return to providing subsidies for the purchase of electric motorcycles, which is planned to be worth Rp5 million per unit.

However, Agus emphasized that the amount of subsidy itself, which is worth Rp5 million per unit or lower than the previous Rp7 million, is still only a proposal from the Ministry of Finance (Kemenkeu), not yet a formal decision.

"I think we are still waiting for the technical team to know the subsidy value. So, later we can translate it, transmit it to how many units of motor," said Agus.

If later the value of the subsidy decided between the Ministry of Finance and the Ministry of Industry (Kemenperin) remains Rp5 million, Agus said, it is a sufficient number to give a signal that the government is focusing on encouraging energy transition.

"If later Rp5 million I think it's a good process, yes. So, the government gives one message that the lesson learned that we get from the geopolitical events, including in Hormuz, first we have to strengthen energy resilience. Thus, the reduction of the need for fuel that we must import is important," he concluded.