Jakarta, Feb. 10 -- A senior economist said incentives for electric vehicles (EVs) remain necessary to support Indonesia's automotive industry amid weakening middle-class purchasing power.

"In fact, there has been a significant decline in middle-class purchasing power, and this is real," Josua Pardede of the Perbanas Institute said during a discussion titled "EV Incentives Removed: Where Is Indonesia's Automotive Industry Headed?" in Jakarta on Tuesday.

He added that data also shows the middle-class population has dropped sharply, while the number of vulnerable groups is increasing.

Josua explained that the downturn has hit sales of lower-priced cars, including low-cost green vehicles (LCGVs), which have suffered steep declines. By con...