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Understanding Consumer Purchase Intention for Electric Vehicles: The Role of Subsidy Types, Economic Benefits, and Facilitation Readiness
Randy Raharja Barlian
Faculty of Engineering, Universitas Indonesia, Depok, 16424, Indonesia
Djoko Sihono Gabriel
Faculty of Engineering, Universitas Indonesia, Depok, 16424, Indonesia
Rahmat Nurcahyo
Faculty of Engineering, Universitas Indonesia, Depok, 16424, Indonesia
Abstract
The transportation sector significantly contributes to carbon emissions in Indonesia. To meet net zero emissions target by 2060, the government promotes a transition to electric vehicles (EVs). However, EV adoption remains below the 2030 target due to low consumer interest. Kompas survey revealed that 54.9% of respondents were unwilling to switch to EVs. This study investigates key factors influencing consumers' intention to purchase electric vehicles, focusing on electric cars in Indonesia. The research introduces a novel approach by separating financial subsidies into two categories: initial purchase subsidies (e.g., reductions in price, purchase tax, registration fee, loan interest rate) and long-term operational subsidies (e.g., reductions in annual tax, energy cost, maintenance expenses). It also considers perceived economic benefit and facilitation readiness as explanatory variables and examines the mediating role of economic benefit. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), data were collected from respondents across numerous Indonesian regions. Results show all four variables significantly influence purchase intention, with long-term operational subsidies exert a stronger influence compared to initial purchase subsidies. Perceived economic benefit significantly mediates subsidy effects. These findings emphasize the need to strengthen subsidy schemes, improve infrastructure readiness, and enhance consumer education to boost EV adoption.
Keywords: Electric vehicle, PLS-SEM, Purchase intention, Subsidy
DOI: https://doi.org/10.24191/ejssh.v10i1.10573
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