Cheap loans are making Indonesia an EV market, not yet an EV maker

President Prabowo Subianto visited a motorcycle plant in Cikarang, West Java on 13 August, watched the 20,000th electric bike come off the line, and told the maker, ALVA, to push output to 200,000 units and eventually two million. The visit came with a national programme for electric motorcycles built around one idea: make the first payment small. Buyers are being offered lower installment rates and zero down payments, so a rider can take a bike home without saving for it first. Prabowo also repeated that Indonesia will start mass-producing its own electric cars by 2028 at the latest.

Analysts told the South China Morning Post that this is the easier half of the job. Cheap credit makes buyers quickly. Factories take longer, and the expensive parts of an electric vehicle, above all the battery, do not have to be made in the country where the vehicle is sold. Their warning is that without stricter local-content rules, meaning rules that force a set share of each vehicle to be made at home, and without real links between nickel processing, battery plants and assembly lines, the incentives could leave Indonesia a large market for other people's vehicles. Chinese brands are already here selling; BYD showed its Atto 3 at a recent auto show.

The next test is close. A separate EV stimulus package is expected shortly, and it will name which vehicles, which battery types and which domestic producers get government support. That list decides whether public money pulls the supply chain, the whole run of steps from raw nickel to a finished vehicle, into Indonesia or simply pays for imports to arrive faster.

Why it matters

For anyone hoping this turns into factory work, the coming stimulus rules matter more than the sales figures. Read the list when it lands: if the support goes to vehicles assembled here from batteries made here, the jobs follow; if it mostly rewards buying, the money leaves with the imports. Indonesia has the nickel, so this is a policy choice rather than a shortage. It also decides how much of the country's mining wealth ever comes back as wages.