The government says it will give incentives to companies that are willing to develop hybrid cars in
Indonesia.
“The government will push for hybrid cars to be produced domestically by giving tax incentives, such as tax duty incentives or luxury tax incentives,” Coordinating Economic Minister Hatta Rajasa told reporters here on Wednesday.
Hybrid cars use fuel and electricity for power. Although more environmentally friendly than fuel-
powered cars, hybrids are also known for their expensive price tags, which makes it difficult for most consumers to own one.
Most hybrid cars in Indonesia are imported and are not produced domestically.
The government has plans to begin the mass production of electric-powered vehicles in 2014, in line with its plans to reduce national fuel consumption.
Ballooning consumption has led the government to increase the money it allots to fuel subsidies.
The government has set a 40 million kiloliter target for subsidized-fuel consumption in its revised 2012 state budget.
The government fears that the widening gap between the price of subsidized and non-subsidized fuel will increase, causing it to exceed its target and thus spend more on subsidies.
The price of subsidized fuel currently stands at Rp 4,500 (48 US cents) per liter, while non-subsidized fuels such as Pertamax and Pertamax Plus stand at Rp 9,850 and Rp 10,150 per liter respectively.
Finance Minister Agus Martowardojo said that developing hybrid cars was a good idea, although the government needed to do more to control consumption.
“Hybrid cars still use fuel and electricity for their energy source, therefore, it is essential for us to also develop gas-based cars and low-cost green cars,” Agus said.
The finance minister added that it was important for the government to ensure that alternative automobiles be produced domestically to stimulate the economy while ensuring long-term sustainability for the nation to fulfill its environmental vehicle needs.
“We want to produce domestically, not just importing the technology, because we do not want just to be a market for other countries,” Agus said.
Four prominent state universities, the University of Indonesia, Yogyakarta-based Gadjah Mada University (UGM), Surabaya-based 10 November Institute of Technology, and the Bandung Institute of Technology (ITB), have been appointed by the government to make road map for the electric car project.
Experts from the universities are scheduled to present their road map to President Susilo Bambang Yudhoyono later this month.
Energy and Mineral Resources Minister Jero Wacik recently announced that the government would also cooperate with automotive company PT Astra International to introduce hybrid cars to Indonesia.
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