Can Indonesia’s Electric Motorcycle Project Revive Manufacturing? Analyst Says Yes

The Employers’ Association of Indonesia (Apindo) has thrown its weight behind the national electric motorcycle project, seeing it as a potential catalyst for reindustrialization. Economic policy analyst Ajib Hamdani noted that if the project genuinely involves domestic industries, it could strengthen the economic ecosystem. ‘The further note is whether this national electric motorcycle concept is genuinely a domestic product, or just a rebranding of a foreign product,’ he said in a written statement on Tuesday, July 21, 2026. He stressed that components like chassis, body packs, and wiring must have a Domestic Component Level (TKDN) of over 50 percent.

Ajib mapped out three positive impacts: alignment with community needs, reduction of exhaust emissions by over 95 percent, and easing the fiscal burden of fuel subsidies. Currently, over 145 million motorbike users in Indonesia cost the government more than Rp500 billion per day in subsidies for Pertalite. The project, he said, could be a momentum for reindustrialization, especially as Indonesia’s manufacturing sector contributes only 19.2 percent to GDP, leading to suboptimal labor absorption.

Drawing a comparison, Ajib highlighted Vietnam’s manufacturing sector, which contributes over 23 percent to GDP due to supportive regulations and low business costs. This has triggered massive job creation and driven Vietnam’s economic growth to 8.39 percent in Q2 2026. He warned that achieving over six percent growth and creating 19 million jobs in Indonesia would be challenging without strengthening the manufacturing base.

Article and image source: en.tempo.co