Celios Economist: Electric Car Subsidy Not Yet Urgen, Needs To BE REVIEWed

JAKARTA - The government plans to include electricity vehicle incentives into the 2023 state revenue and expenditure budget (APBN). The plan also reaps the pros and cons among economists.

Economist and Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, said that the incentive rules for electric vehicles need to be reconsidered by the government and related parties.

This is because the nominal subsidy for electric vehicles is considered too large and can have an impact on the 2023 State Budget, which Indonesia is threatened with a global recession.

"Actually, the subsidy for electric cars is not urgent. The amount of subsidies also needs to be reviewed because the condition of next year's APBN still needs a budget to anticipate the recession," Bhima told VOI, Tuesday, December 20.

Moreover, said Bhima, the condition of the fiscal space or state income is in poor condition.

"Fiscal spaces are getting narrower, especially the amount of the state budget deficit cannot be above three percent," he said.

Bhima suggested that the government should see the size of TKDN from electric vehicles that want to be subsidized, so that the incentives issued will not be wrongly targeted.

"The amount of TKDN is also important as a category of subsidies for electric vehicles. Currently, many cars and electric motors are imported, as well as spare parts. Do not let the government use imported goods subsidies using APBN money, that is clearly not on target," he said.

Not only that, Bhima assessed that the subsidy of electric vehicles is feared to increase congestion in Indonesia.

"If electric cars are subsidized, they are worried about adding to traffic jams, especially in big cities," he concluded.

Previously, the Government was finalizing incentive rules for the purchase of electric cars or motorcycles.

Later, these incentives will be given to every purchase of electric vehicles, both cars and motorbikes, which are produced by companies that have factories in Indonesia.

This incentive is expected to provide various benefits for the development of the electric vehicle industry.

According to the plan, the incentives to be provided for the purchase of electric cars are around Rp. 80 million, and for hybrid-based electric cars around Rp. 40 million.

Meanwhile, for the type of two-wheeled vehicle, the government will provide an incentive of around Rp. 8 million.

Then, the motor converts to an electric motorcycle, getting an incentive of around Rp. 5 million.