Indonesian President Prabowo Subianto has inaugurated the national electric two-wheeler (Molinas) programme and its supporting ecosystem, developed by Ilectra Motor Group (Alva), a wholly owned subsidiary of Indika Energy (INDY).

The inauguration took place at Alva's production facility in Bekasi, West Java, on August 13th, where Prabowo called for an increase in domestic electric motorcycle production and outlined measures to accelerate Indonesia's transition to electric mobility.

Alva has operated commercially since 2022 and has total assets of US$ 35.4 million. The company has produced 20,000 electric two-wheelers to date, but Prabowo called for significantly higher output.

"Today, the Indika Group has successfully produced 20,000 two-wheelers. I told the Indika Energy Group that if you reach 200,000, I will come again; if you reach two million, I will come again," Prabowo said.

Prabowo said Indika Group was supporting the government's efforts to develop a national electric two-wheeler ecosystem, noting that the group had previously been known primarily for its mining operations.

"Indika has been working, it started out in mining. But I don't know whose initiative it was to have the idea of making electric two-wheelers," Prabowo said.

Prabowo recalled that he had initially been sceptical when several businesspeople he met in Hambalang told him they were developing a national electric vehicle ecosystem.

"I want to see your production line, is it real? Or perhaps you just took a company from somewhere and put your brand on it?" he said.

After seeing the company's production capabilities, Prabowo backed the development while warning private-sector companies about the risks associated with building an electric vehicle industry.

"There are risks today, you are facing extraordinary competition from major countries," he said.

He called for greater cooperation between businesses and the government to develop an Indonesia Incorporated approach and strengthen the country's position in the global electric vehicle industry.

Molinas programme targets two million electric two-wheelers

To support the target of increasing national electric two-wheeler production to two million units, Prabowo urged relevant stakeholders, including Indonesia's sovereign investment agency BPI Danantara, to provide funding and infrastructure support for the domestic EV ecosystem.

The Molinas programme is intended to establish an integrated electric two-wheeler ecosystem covering manufacturing, batteries, charging infrastructure and after-sales services.

State-owned lenders are also expected to offer lower-cost vehicle financing with longer repayment periods to encourage electric two-wheeler purchases. Danantara CEO Rosan Roeslani said at the same event that the lenders would provide cheaper vehicle loans with longer tenors.

Prabowo said the government was preparing consumer-focused financing measures, including lower interest rates and the possibility of eliminating down payments for electric vehicle purchases.

"We will reduce interest rates on installments for the people. We will also try to eliminate down payments," he said.

The President also highlighted potential operating-cost savings from electric two-wheelers, saying that switching from conventional fuel-powered two-wheelers to electric models could reduce daily mobility expenses by 50% to 70%.

The government is also reviewing a trade-in programme under which owners of conventional petrol-powered two-wheelers could exchange their vehicles for electric models by paying a relatively small additional amount. The government has discussed other incentives to accelerate electric two-wheeler adoption. Jakarta has said it may provide a IDR 5 million (US$ 279.80) subsidy for each electric two-wheeler purchased, with a total quota of 500,000 units.

Prabowo said accelerating the transition to domestic electric mobility would be important as international markets introduce carbon taxes and cities impose tighter restrictions on vehicle emissions. He cited cities such as Beijing as examples of how urban traffic management could evolve.

Electric mobility linked to industrial development

Separately, Minister of State Secretary Prasetyo Hadi said the development of the electric vehicle ecosystem should also contribute to Indonesia's industrial downstreaming efforts.

"After the inauguration, the important thing is to ensure that industrial development, supply chains, infrastructure, financing and market absorption can proceed in an integrated and sustainable manner," Prasetyo said.

Indonesia has set a target of having 13 million electric two-wheelers on its roads by 2030.