LATEST ELECTRIC MOTORCYCLE NEWS: INDONESIA AND INDIA

How are India and Indonesia using subsidies to promote electric motorbikes?

Due to increasing concerns about the threat of global warming on our planet, many governments are trying to promote electric vehicles to their citizens, to reduce transport CO2 emissions and other harmful greenhouse gases from going into the Earth’s atmosphere. Subsidies are a financial incentive which governments are increasingly using to help citizens purchase electric vehicles that emit zero CO2, instead of fossil fuel transportation.

E-motorcycle & moped subsidies have recently been used in the Netherlands, Cyprus, and Thailand, as well as 2 of the most heavily populated countries in the world, India and Indonesia. Both have implemented various strategies to facilitate electric motorcycle popularity over the past few years, including subsidies to help alleviate high costs for consumers.

Indonesia subsidies to make electric motorcycles more accessible

Indonesia’s government has made widespread commitments to increase the take-up of electric vehicles. Most recently it announced an allocation of $455 million in subsidies to cover 800,000 new electric motorcycle purchases and the conversion of 200,000 combustion motorcycles.

This latest news is an exciting development for the industry and consumers alike, and aligns with Indonesia’s other EV development plans, such as a large increase in battery charging infrastructure. The government also plans to help e-motorcycle customers further by making home charging more convenient and cost effective, by offering electric system upgrades and overnight charging discounts through its electricity provider PT PLN. 

Indonesia is hoping its various EV growth schemes will help it meet its target of 13 million units of electric two-wheeled vehicles on the road by 2030. This target is estimated to have a positive impact on its sustainability efforts by reducing CO2 emissions by 7.23 million tonnes and saving the equivalent of 29.79 million barrels of oil.

India’s e-motorcycle purchasing incentives

Electric motorcycle popularity in India has accelerated through the years with the help of subsidies, however it has experienced a recent decrease, which is thought to be due to a recent reduction in subsidies.  

When India announced that its FAME II (Faster Adoption of Electric Vehicles) scheme would end in April 2024, it first led to a boom in sales during March, as users rushed to make the most of the subsidy offer before it ended. After the subsidy ended, there was a big decrease in E2W registrations, from 1,39,531 in March to 65,111 in April.

In April, it introduced a new subsidy scheme, Electric Mobility Promotion Scheme (EMPS) to support 3,333,387 electric motorcycles, equating to subsidies of half the amount of its predecessor, the FAME-II scheme. Meanwhile, there have been positive reports with manufacturers reporting sales increases in May and with 79,530 e-motorcycle units sold in June, things are looking better compared to the lower sales of April. 

Although the market has been looking more promising over the past few months, the government is reportedly looking to launch a third edition of the hugely successful FAME subsidy scheme in September 2024, to help improve e-motorcycle purchasing further. 

On top of subsidies, there are also calls for the government to reduce EV taxes to help e-motorbike buyers. Indian riders currently have to pay vehicle goods and service tax (28%) plus road tax, and insurance premium (plus additional 3% tax for premium bikes), an amount that’s around four times higher than other countries such as Indonesia and Thailand. 

E-motorcycle subsidies and what’s next: 
India and Indonesia are nourishing their electric vehicle sectors with various incentives to drive growth, and subsidies have proved successful in encouraging consumers to buy electric motorcycles, however, what will happen if subsidies and other financial incentives are taken away, is there a longer term method for helping e-motorbikes be more affordable to buy? 

In the meantime, many countries are watching India, Indonesia and other EV promoting countries, to see the effects of their incentives, as they look at improving electric transportation in their respective regions to reach sustainability targets.