Source: CNNIndonesia.com | January 9, 2025

Subsidies for electric buses are considered more beneficial than those for electric cars and electric motorcycles because they are more effective in reducing congestion and pollution in Jakarta, according to the Strategic Transportation Initiative (Instran).

“I’m asking my fellow journalists to convey that subsidizing electric buses will be far more beneficial for the public than for electric cars and motorcycles,” said Instran founder Ki Darmaningtyas in Jakarta on Thursday (January 8), as reported by Antara.

Darmaningtyas explained that subsidies for electric cars and motorcycles actually increase their population and are said to cause traffic jams.

“But subsidizing electric cars or motorcycles will definitely increase congestion. Pollution will decrease, but congestion will increase,” he said.

Like electric cars, the government also provides subsidies, one of which is the Government-borne Value Added Tax (PPN DTP). The categories for electric buses are as follows:

– Electric buses with a minimum 40 percent Domestic Content (TKDN), 10 percent DTP VAT

– Electric buses with a 20-40 percent Domestic Content (TKDN), 5 percent DTP VAT

However, the DTP VAT expired in December 2025. So far, no decision has been made to continue it into 2026.

The Ministry of Industry, the supervisor of the domestic automotive industry, is preparing a new subsidy for electric vehicles, but has not yet mentioned this for electric buses.

However, the subsidy scheme outlined by Minister of Industry Agus Gumiwang is broader than before, encompassing various battery types.

Lithium ferrophosphate (LFP) batteries are planned to receive a smaller stimulus, while nickel-based electric vehicles will receive a larger one.

In early 2026, Agus emphasized the local production of TKDN, which he mentioned as a principle for the proposed new subsidy. “But most importantly, for us to produce environmentally friendly vehicles, we need to provide more detailed incentives,” said Agus.