Sales of electric motorcycles declined by 40% year-on-year in the first half of 2025, primarily due to consumer hesitation caused by uncertainty regarding the continuation of government subsidies for new purchases, according to industry representatives.

The Indonesian Electric Motorcycle Industry Association (Aismoli) reported that the most notable decline occurred among manufacturers affiliated with the association. The reduction in purchases reflected the sector's responsiveness to policy changes, with both producers and consumers delaying decisions pending clarity on future incentives.

"Quarter two was slightly better than quarter one this year, but year-to-date figures still reflect a 40% decline," stated Tekno Wibowo, Commercial Director at local automotive manufacturer Polytron, on 11 June, citing Aismoli data.

"The main factor is uncertainty surrounding subsidies. Many consumers are delaying purchases in the hope of receiving the IDR 7 million (US$ 430) incentive."

Indonesia's two-wheeler subsidy programme, which ended in late 2024, had covered approximately 90% of electric motorcycle sales and had influenced market activity over the past two years.

Under the previous arrangement, consumers could obtain a subsidy of IDR 7 million for new electric motorcycle purchases and IDR 10 million for converting petrol-powered motorcycles to electric alternatives.

The government allocated IDR 350 billion in the 2024 state budget to support the purchase of 50,000 new units. Following the termination of the programme, demand decreased, and manufacturers were required to revise their strategies. Polytron, for example, introduced price reductions to sustain sales in the absence of subsidies.

"Some of our models are currently being offered at discounts of up to IDR 7 million," Wibowo said, adding that the lack of clear policy guidance had made planning more difficult.

"A definitive response - either affirmative or negative - is necessary to facilitate proper planning. If subsidies are no longer being considered, this should be communicated clearly to avoid ongoing consumer delays," Wibowo further added.

Aismoli Secretary-General, Hanggoro, raised similar concerns. On 11th June, he stated that the removal of the subsidy had contributed to reduced sales, especially in contrast to the preceding two years when incentives were still active.

He noted that market recovery was possible but likely to be gradual, and that declining consumer demand had further affected the industry. "Regulatory uncertainty has led companies to adjust their marketing approaches."

Deputy Industry Minister, Faisol Riza, stated in May that the IDR 7 million subsidy would be reinstated in 2025, with approval from Finance Minister Sri Mulyani Indrawati.

Coordinating Economic Minister, Airlangga Hartarto, added that the implementation of the programme was still awaiting the issuance of a regulation by the Finance Ministry.

He also noted that the quota for subsidised units would depend on the timing of the programme's rollout, with only six months remaining in the year.