Without Subsidies, Demand for Electric Motorcycles Could Rebound

KatadataOTO – The performance of Indonesia's electric motorcycle market in 2025 has experienced a sharp decline. This is due to the uncertainty of government subsidies.

This has caused the public to wait for government assistance, leading them to postpone the purchase of electric two-wheeled vehicles.

In 2026, the provision of electric motorcycle subsidies is also still unclear, potentially hindering the performance of the Electric Vehicle (EV) industry.

“However, this does not mean that continuous cash subsidies are the only way. There is room for other strategies that can curb the decline and slowly build the market,” said Josua Pardede, Chief Economist of Permata Bank, to KatadataOTO recently.

Photo: Courtesy

According to Josua, there are several strategies that can be implemented by domestic electric motorcycle players or manufacturers.

For example, Alva, Gesits, and Polytron could replace some of the subsidy's function with more aggressive price reductions.

Next is implementing packages with low down payments and longer, healthy tenors. Then, installment schemes linked to daily cost savings.

“So that consumers feel their cash flow is more secure. This is important because the adoption of electric motorcycles in Indonesia has so far been heavily driven by incentives,” Josua continued.

Furthermore, the price reduction for new electric motorcycle batteries is expected to become more significant in the near future.

Meanwhile, battery rental schemes and after-sales guarantees can reduce consumer fears about the service costs of the power storage unit and its resale value.

“Third, the expansion of a truly user-friendly charging and battery swapping network will enlarge the group of previously hesitant buyers,” Josua emphasized.

At the government level, Josua suggested that President Prabowo Subianto and his ministers could shift the focus from cash subsidies to non-cash incentives.

The government could also provide regulatory certainty regarding electric motorcycles to stimulate the public.

“For example, providing traffic or parking conveniences for electric vehicles. Such as exemption from the odd-even rule in DKI Jakarta,” Josua concluded.

Photo: KatadataOTO

It doesn't stop there; the government is also advised to promote technical standards and infrastructure.

By doing so, the cost of owning an electric motorcycle can naturally decrease, making it more affordable for the lower-middle class.

If all the above strategies are implemented, it is believed they can boost electric motorcycle sales in 2026.