The Ministry of Industry is increasing the involvement of small and medium industries (IKM) in the battery-based electric vehicle (KBLBB) ecosystem, particularly in electric two-wheelers.

The initiative is focused on expanding the market for finished electric vehicles, developing the domestic component industry, increasing local added value and creating employment.

Minister of Industry Agus Gumiwang Kartasasmita said electric vehicle industry development should create opportunities for small and medium industries to enter the supply chains of larger manufacturers. IKM development should therefore focus not only on production capabilities but also on meeting the requirements for becoming industrial suppliers.

"Our goal is not simply to increase the number of IKM receiving development support, but also to ensure they meet industry requirements. IKM must be able to qualify as suppliers, enter the supply chain, and ultimately secure sustainable orders," the Minister said in Jakarta on August 18th, 2026.

Two IKM supported by the Ministry of Industry, Kannindo Metal Industri and Multikon Rekatama Industri, have become part of the supply chain for Indonesia's national electric motorcycle programme (MoLiNas), launched by President Prabowo Subianto on August 13th, 2026, in Cikarang.

The two companies can produce battery boxes and battery brackets for the Alva MoLiNas, manufactured by Electra Mobilitas Indonesia. Their participation provides domestic IKM with an opportunity to supply components for electric vehicles, subject to improvements in technology, quality, productivity and market access.

Through the Directorate General of Small, Medium and Miscellaneous Industries (IKMA), the Ministry of Industry has implemented programmes to develop component manufacturers for transportation equipment. These programmes include identifying potential IKM, improving technological capabilities and quality, developing prototypes, conducting testing and certification, and integrating IKM into electric vehicle industry supply chains.

The Minister said IKM development within the electric vehicle ecosystem follows a supplier-development approach based on the requirements of major manufacturers and original equipment manufacturers (OEMs).

Under this approach, the capabilities of local IKM are mapped against the component requirements of the electric vehicle industry. Potential IKM then undergo supplier-readiness assessments to identify capability gaps requiring improvement.

"The assessment covers various aspects, including technology, quality, production capacity, engineering, certification, productivity, costs, and delivery performance. This allows development interventions to be more precisely targeted," Agus said.

According to the Minister, an industry-demand-based development model is needed to align IKM capacity-building programmes with market requirements. "IKM development must start with market demand. OEMs and Tier-1 suppliers communicate their requirements and standards, after which the government provides support to help IKM close those gaps through improvements in technology, human resources, product quality, standardisation, and access to testing," he said.