Jakarta. The Energy and Mineral Resources Ministry is drafting a new incentive program for electric vehicles and supporting industries including companies that provide public charging stations.

Among the proposed incentives, the ministry will provide tariff cuts in charging stations and financial assistance for the conversion of fuel-burning motorcycles to electric bikes, according to Dadan Kusdiana, the ministry's director general of electrification.

A motorcycle owner is entitled “to get Rp 7 million incentive of the total conversion cost of Rp 15 million”, Dadan said in a recent interview.

"This year, we are planning to convert 50,000 motorbikes," he said.

The ministry also considers lowering electricity tariffs for charging station operators to allow them to attract more customers. 

Sources told Jakarta Globe’s sister publication Investor Daily the tariff at medium-voltage stations will be set at Rp 714 per kilowatt hour, while the tariff at the low-voltage station is set at Rp 1,650 per kWh.

The ministry will provide a lower tariff for stations that provide at least three fast charging units and two “ultrafast” charging units, Dadan said.

The new incentive scheme will amend the existing ministerial regulation, he said.

"This will make charging station investment even more attractive," Dadan said.

The ceiling tariff is put at Rp 2,475 per kWh.

The proposed regulation sets service cost at Rp 21,974 for fast charging and Rp 62,500 for ultrafast charging.

The government is targeting to have an additional 1,030 charging stations this year, according to Dadan. 

Last year, the country saw 1,415 new charging stations or 204 percent of the target of 693 units. The investment needed to build a charging station is between Rp 200 million and Rp 400 million, depending on the speed for a complete fill-up.

The government has revealed its ambition to become one of the three largest EV battery manufacturers in the world by 2027. 

Indonesia is set to produce its first homegrown lithium battery in 2025 which will mark the country’s first step in becoming a major EV ecosystem.

In the next decade, the government projects that 2.2 million electric cars and 13 million electric motorcycles will be sold each year. Indonesia also aims to have 31,000 charging stations and 67,000 battery swap stations by 2030.

A number of global EV battery manufacturers have invested in the country, one of which is Chinese company CATL, which inked a deal with state-owned mining holding MIND ID to build an EV battery ecosystem earlier this year.

Global EV giants BYD Automobile and Tesla are also finalizing their investment plans in Indonesia.  

The total investment going into Indonesia’s upstream and downstream sectors of the EV battery industry is expected to reach more than $ 21 billion in the next five years.