Indonesia’s Electric Two-Wheeler Market Stalls Below 1% Adoption as Industry Identifies Five Structural Bottlenecks

JAKARTA, Investortrust.id — On the manufacturing floor, Indonesia’s electric motorcycle transition looks like an emerging industrial triumph. Assembly lines are multiplying, local component integration is expanding, and scores of domestic and international brands have set up shop across Java’s industrial corridors.

Out on the asphalt, however, the revolution is struggling to shift into gear. Electric two-wheelers continue to account for around 1% of the nation’s vast motorcycle fleet of roughly 145 million conventional combustion units, according to the Indonesian Electric Motorcycle Industry Association (Aismoli).

The persistent adoption gap highlights a striking paradox within Southeast Asia’s largest automotive hub. While heavy industrial investment and localization mandates have created abundant assembly capacity, consumer appetite remains constrained by price sensitivity, infrastructural friction, and policy volatility. For Jakarta, converting one of the world's most motorcycle-dense populations into electric adopters is proving far more complex than simply subsidizing production lines.

An Industrial Boom Meets Sluggish Retail Demand

According to Aismoli data released Sunday, Aug. 23, 2026, there are currently 83 companies registered with the Ministry of Industry, with 69 active players dedicated strictly to manufacturing two-wheeled electric vehicles.

"If you ask whether the industry is growing? Yes, it is growing. The number of brands is increasing, production capacity is rising, and localization continues to advance," Riniwaty Sinaga, Public Relations & Event Executive at Aismoli, said in Jakarta on Sunday.

Yet commercial demand has experienced volatile swings. Driven by earlier state subsidies, electric two-wheeler sales surged from approximately 17,000 units in 2022 to 77,000 units in 2024.

That momentum hit a sudden roadblock once state support expired. In 2025, electric motorcycle sales dropped roughly 23% year-over-year. Aismoli noted, however, that Indonesia’s contraction was relatively modest compared to international benchmarks, where some markets suffered sales collapses exceeding 50% following subsidy phase-outs.

Despite the cooldown, manufacturers are staying put. "Industry players have already poured substantial capital into the market, and they will not simply pull out," Sinaga explained.

The Five Bottlenecks to Mass Adoption

Aismoli has identified five systemic hurdles currently capping electric motorcycle adoption across Indonesia, pointing to upfront price affordability relative to conventional combustion models, lingering consumer skepticism over battery longevity, patchy regional after-sales and technician networks, weak resale values on the secondary market, and persistent unpredictability surrounding government incentive timelines.

Among these, regulatory stability remains the critical anchor for capital planning. Sinaga noted that corporate assemblers require absolute clarity regarding the scale, eligibility criteria, and disbursement schedules of state incentives to structure pricing strategies and clear retail inventory.

Under the 2026 framework, the government has set aside Rp 3 trillion ($187.5 million) to fund electric motorcycle incentives, but reduced the subsidy payout to Rp 3 million ($187.50) per unit—down from the earlier Rp 7 million ($437.50) incentive.

Industry executives caution that the lower incentive level could dampen consumer purchasing power, especially if bureaucratic execution drags into the final quarter of the year.

"If the program only gets underway past September, it simply will not be effective," Sinaga stated, warning that administrative delays leave prospective buyers with an increasingly narrow window to utilize incentives before year-end.