The Electric Motorcycle Market Will Stagnate Without Subsidies This Year

KatadataOTO – Several sectors of the automotive industry still require stimulus. One of them is the market for electric motorcycles in Indonesia.

Government assistance is considered capable of stimulating the market. However, in 2026, the outlook for electric motorcycle subsidies is not yet clear.

“Without incentives, the opportunity is still there. But growth tends to be slow,” said Josua Pardede, Chief Economist of Permata Bank, to KatadataOTO some time ago.

Josua explained the many impacts for manufacturers if the government does not provide electric motorcycle subsidies in 2026.

Photo: KatadataOTO

Later, manufacturers will rely on pricing strategies, forcing them to market Electric Vehicles (EVs) at an affordable price.

However, this strategy is considered not quite right, as manufacturers have to cut their sales profits.

“For electric motorcycles, the data actually provides the clearest lesson that incentives are not just a sweetener,” Josua said.

In addition, electric motorcycle manufacturers must also rely on existing financing and infrastructure, not on the euphoria of government subsidy programs.

Therefore, the government is advised to pay more attention to the electric two-wheeler market in 2026.

This is important so that the market can continue to grow, while also competing with gasoline-powered two-wheelers.

“The experience of 2025 shows that as soon as the subsidy is gone, demand drops sharply,” Josua emphasized.

It can be concluded that government subsidies for electric motorcycles are the main driver of mass demand.

The stimulus is able to invigorate the electric two-wheeler market, bringing a positive impact to the automotive industry.

“So without incentives, electric motorcycles can still sell, but are more likely to survive in a specific niche,” he concluded.

For your information, in 2024 the government provided an electric motorcycle subsidy worth IDR 7 million, useful as a price discount at the time of purchase.

The provisions regarding the provision of incentives for electric two-wheelers are stated in Permenperin or Minister of Industry Regulation Number 21 of 2023.

Photo: KatadataOTO

This assistance was quite successful in tempting the public to switch from gasoline-powered motorcycles to electric ones.

According to data from the Indonesian Electric Motorcycle Industry Association (Aismoli), 62 thousand units were sold throughout 2024.

Of the number above, the majority of consumers made their purchases through the IDR 7 million electric motorcycle subsidy program.