Indonesia is making significant strides in the electric vehicle (EV) sector with the establishment of its first battery cell factory through a $1.1 billion collaboration between Hyundai and LG in Karawang. This initiative is part of Indonesia’s plan to bolster high-tech manufacturing and tap into its vast nickel reserves, crucial for EV batteries.
With nearly half of the world’s nickel supply coming from Indonesia, the country has banned nickel ore exports to encourage foreign companies to set up local processing plants. The government’s goal is to create a global EV hub by leveraging its nickel resources.
Furthermore, the Indonesia Battery Corporation (IBC), formed by four state-owned companies, is leading the charge in developing a complete EV ecosystem, from mining to battery production. The company aims to invest $17 billion by 2030 to produce 140 GWh of batteries, with export targets set at 50 GWh.
Indonesia’s EV Ambitions
International partnerships, such as LG Chem’s $9.8 billion commitment to an integrated battery industry, and negotiations with Germany’s StreetScooter demonstrate Indonesia’s determination to strengthen its EV sector. Despite low EV sales currently, the government is targeting substantial growth, with plans to sell 600,000 four-wheeled and 2.45 million two-wheeled EVs annually by 2030.
President Joko Widodo’s regulation to promote battery-powered vehicles and the implementation of incentives for local content and charging infrastructure underscore Indonesia’s aspirations to become a leading manufacturer and exporter of EVs. This strategic shift aligns with global sustainability goals and signifies a new era in Indonesia’s industrial development.