The Indonesian government plans to provide subsidies to buy electric vehicles starting next year. Indonesia targets to have 2.5 million electronic vehicles by 2025.
The use of electric vehicles is expected to reduce air pollution so as to accelerate the achievement of the net zero emission target.
For this reason, the Minister of Transportation, Budi Karya Sumadi, as quoted by the Bloomberg news agency, stated that the government is currently determining the amount of the subsidy and how to provide the right subsidy mechanism.
In addition, the government is preparing regulations so that the provision of subsidies for the purchase of electric vehicles in the future can become a game changer for the domestic automotive industry.
“Someone asked me why Indonesia is so ambitious with EVs,” said Transportation Minister Budi Karya as quoted by Bloomberg.
According to Budi, it may be because other countries have not experienced the same thing as Indonesia in terms of air pollution that comes from the combustion of motorized vehicle engines.
Indonesia is currently ranked 17th among the countries with the most polluted air in the world, according to the IQAir index, which scores air quality in 117 countries.
As part of its efforts to provide incentives to build an eco-friendly vehicle ecosystem, the Indonesian government recently made a policy to encourage domestic production of electric vehicles.
For example, in the last year, the Indonesian government required nickel producers to prioritize the use of domestic electric vehicle batteries for production.
This policy is believed to be effective because Indonesia is the largest nickel producer in the world.
The Indonesian government wants the policy to stop the export of nickel and other raw materials and increase the added value of domestic mining products.
In addition to providing subsidies, Budi Karya added that as a transportation regulator, he is also considering subsidizing efforts to convert fossil fuel vehicles into battery-based electric vehicles.
Nevertheless, Budi Karya emphasized that the Government would be very careful with this policy and was studying the plan so that it would aim to create major changes in the labor-intensive automotive industry.
