Jakarta. The government announced on Monday that it would allocate Rp 7 trillion or about $455.8 million to subsidize the purchase and conversion of electric motorbikes over the next two years.

The incentives for electric motorbikes have now entered into force. 

According to Finance Minister Sri Mulyani, each unit of brand new electric two-wheelers and a converted e-motorbike that originally ran on combustion engines will get a subsidy of Rp 7 million. These subsidies will be in effect for 2023-2024, and will only apply to a million electric motorbikes.

"So we have allocated a total of Rp 7 trillion for the next two years. In 2023, we will grant incentives totaling Rp 1.75 trillion for 200,000 new e-motorbikes and 50,000 converted ones," Sri Mulyani told a press briefing in Jakarta on Monday.

Next year, 600,000 brand-new electric two-wheelers and 150,000 converted fuel-powered motorbikes are expected to get the subsidies. The government has budgeted Rp 5.25 trillion for the e-motorbike incentive rollout in 2024.

Micro, small, and medium enterprises (MSMEs) that receive microloans will be the first in line to get the motorbike incentives. The government will also prioritize those who receive working capital aid, wage subsidies, and 450-900 volt-amperes (VA) electricity subsidies. 

There are no specific requirements for conversion subsidy beneficiaries. 

Read More: PLN To Build Thousands of EV Charging Stations

According to the minister, electric motorcycle producers have to meet the required local content of at least 40 percent to get qualified for the incentives. 

“They are not allowed to increase the sale price [of the electric motorbikes] as long as the incentives are still in effect,” Sri Mulyani said.

To date, eight electric motorbike producers with 13 models are entitled to the incentives as they have all met the required 40 percent local content.

Incentives for electric four-wheelers were originally slated to enter into effect today. The government, however, decided to push it back to April 1, as they are still finalizing the details. 

Industry Minister Agus Gumiwang earlier this month named Gesits, Volta, and Selis as the electric motorbike producers who were eligible for the incentives.

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