Jakarta. Indonesia is preparing incentives for electric vehicle purchases, targeting an initial 100,000 cars as part of efforts to boost demand, support industry, and reduce fuel consumption.

Finance Minister Purbaya Yudhi Sadewa said the policy is expected to take effect in early June 2026 after discussions with Industry Minister Agus Gumiwang Kartasasmita.

The incentives aim to lift EV adoption while easing pressure on the energy subsidy budget by cutting fuel use.

“If the first 100,000 units are taken up, we will expand the program,” Purbaya said.

Details on the incentive structure have yet to be announced, with technical arrangements to be finalized by the Industry Ministry and the Coordinating Ministry for Economic Affairs.

The government will also extend support to electric motorcycles, offering Rp 5 million ($287) per unit for an initial 100,000 units, with room for expansion.

Officials expect the policy to support economic activity in the second half of 2026, particularly in the third and fourth quarters.

Purbaya said the government is seeking to strengthen growth by activating both demand and manufacturing, while encouraging greater private sector participation.

Agus Gumiwang added that EV incentives could help reduce fuel consumption and subsidy burdens, while supporting Indonesia’s broader push to accelerate energy transition and develop its domestic EV industry.