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“Electrified Vehicles in Indonesia: Government Subsidies and Hybrid Car Demand”

Jakarta

Hybrid cars are not environmentally friendly vehicles that receive subsidies from the government. Without subsidies, hybrid cars seem to be in demand.

There are various electrification vehicles offered in Indonesia to reduce exhaust emissions. Among the electrified vehicles, some of them have received special privileges from the government. Privileges in the form of price discounts and VAT incentives.

Discounts apply to the purchase of a new electric motorbike. Then for electric cars also get a VAT incentive of 10%. The VAT incentive has also cut the price of electric cars. The government provides a series of subsidies so that the price of electrified vehicles can be more affordable for the people.


Unfortunately, not all electric cars can cut their prices, only those that meet the requirements for a minimum Domestic Component Level (TKDN) of 40%. Of all the electric cars sold in Indonesia, only the Wuling Air ev and Hyundai Ioniq 5 have received this incentive. The price of the Wuling Air ev was cut by Rp. 20 million, while the Hyundai Ioniq 5 was cut by Rp. 70 million. Meanwhile, for other electric car models, the price is normal.

In addition, hybrid cars which are counted as electrification vehicles do not receive subsidies from the government. Minister of Industry Agus Gumiwang Kartasasmita explained that hybrid cars are not included in the battery ecosystem. Thus it does not get government subsidies.

“This hybrid is not an ecosystem, we have a battery ecosystem, nickel. So that’s what we want to push for,” Agus said at the time.

Even without subsidies, hybrid cars are arguably still in demand. Data from the Association of Indonesian Automotive Industries (Gaikindo) describes hybrid car sales reaching 2,870 units. Kijang Innova Zenix became the best-selling with a total of 1,961 units. While the rest are Ertiga Hybrid, C-HR Hybrid, Corolla Cross Hybrid, Lexus ES 300h, to Almaz RS hybrid.

When compared to pure electric cars, the distribution of wholesales for hybrid cars is still much larger. The distribution of electric cars with the injection of subsidies as of April 2023 only reached 1,285 units. There seems to be an increase in the distribution of electric cars but not too significant.

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(dry/lth)

2023-05-15 12:40:28
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