The Ministry of Energy and Mineral Resources (ESDM) announced an increase in the subsidy amount for the conventional fossil fuel-powered motorcycle conversion program to electric motorcycles, from the previous IDR 7 million to IDR 10 million.

"Regarding conversion, the set subsidy is IDR 10 million. It is effective immediately," said Minister of ESDM Arifin Tasrif at the ESDM Ministry Building on Friday (10/11/2023).

Nevertheless, he emphasized that the subsidy amount for the purchase of new electric motorcycles remains at IDR 7 million.

"That applies to new motorcycles. Currently, new and used motorcycles have different regulations," expressed Arifin.

Previously, Rachmat Kaimuddin, Deputy for Coordination of Infrastructure and Transportation at the Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves), stated that the government is conducting an evaluation and calculation regarding the subsidy amount for conversion due to its suboptimal realization.

"We are trying and calculating. The decision has not been made yet, but this is under consideration," he said during the FGD "Mapping Indonesia's Decarbonization Towards Net-Zero" in Jakarta on Friday (10/11/2023).

Rachmat explained that the incentive and subsidy scheme for electric vehicles next year is essentially not much different from 2023. For electric cars, incentives are provided through a reduction in VAT from 11 percent to 1 percent.

Meanwhile, the purchase of new electric motorcycles will still receive a subsidy of IDR 7 million. The same goes for the conversion of conventional motorcycles to electric ones, which will still receive a subsidy of IDR 7 million.

"We will reevaluate; currently, the subsidy for conversion is also IDR 7 million. We will look further, considering that the conversion process has its own appeal and may have different challenges compared to buying a new motorcycle," he added.

The government's target for 2023 is to have 50 thousand motorcycles participating in the conversion program, increasing to 150 thousand units next year with a subsidy of IDR 7 million per unit for converted motorcycles. Currently, the government has increased the subsidy amount for conversion to IDR 10 million.

This program is launched as part of the government's commitment to reduce greenhouse gas emissions by 31.8 percent by 2030, decrease fuel imports, provide compensation to the public, and save fuel costs.

Additionally, the conversion program is expected to have a positive impact by increasing electricity consumption by 15 GWh, reducing emissions by 30,000 tons, and cutting fuel imports by 20,000 kiloliters, directly resulting in saving the country's foreign exchange reserves by USD 10 million.