The strategy of the Southeast Asian archipelago to establish itself as a significant participant in the electric vehicle (EV) supply network hinges on utilizing its extensive nickel reserves to entice international investment. As indicated by the US Geological Survey, Indonesia possesses the largest nickel reserves globally, estimated at around 21 million tonnes, constituting approximately 22% of the recognized global reserves.

Nonetheless, Indonesia's plan for advancement centered around nickel has not succeeded in capturing Tesla's interest. Tesla has moved away from nickel-based batteries and now employs lithium iron phosphate (LFP) battery cells for its standard-range vehicles.

Hozon and Mitsubishi expressed interest in investing in Indonesia's EV industry

Hozon, the Chinese electric vehicle (EV) startup, has announced its intention to commence domestic manufacturing of its Neta-branded cars in Indonesia beginning in 2024. The company has formed a partnership with PT Handal Indonesia Motor, and the two entities will initiate the assembly of complete knock-downs (CKDs) and paint-coated vehicle bodies, commencing in the second quarter of the following year.

"We believe that Indonesia has great potential to accept electric cars as vehicles to support daily mobility activities because they are proven to be effective and environmentally friendly," said Wang Chengjie, assistant president of Neta Auto and vice-president of Neta Overseas.

On the other hand, Mitsubishi Fuso Truck and Bus is set to unveil electric trucks in Indonesia, aiming to uphold its status as a leading truck seller in the nation, even as competition from Chinese manufacturers increases. The company plans to manufacture the eCanter, a compact electric truck, at its Kawasaki plant located in Kanagawa prefecture, Japan, and subsequently ship it to Indonesia.

Mitsubishi Fuso is anticipated to join forces with Mitsubishi Corp. and other associates to facilitate sales operations in Indonesia. Beyond Indonesia, the company has outlined its intentions to introduce the eCanter in several other locations, including Taiwan, Hong Kong, Singapore, and Chile in the coming times.

Jokowi to prioritize investment for EV ecosystem

While Indonesia persists in its extended endeavor to attract investments from billionaire Elon Musk, some observers have indicated that the nation's extensive nickel reserves might not be as compelling a lure as anticipated. Furthermore, the reliance on fossil fuels in Jakarta suggests that the commitment to renewable energy initiatives might not be entirely sincere.

Luhut Pandjaitan, the coordinating minister of maritime affairs and investment for Indonesia, announced last month his intention to engage with the world's wealthiest individual during a visit to California on August 2. This marks yet another effort to establish an agreement as Indonesia aspires to establish itself as a hub for electric vehicle manufacturing within the region.

President Joko ‘Jokowi’ Widodo is expediting his efforts to position Indonesia as a worldwide center in the electric vehicle production network, a goal that is becoming increasingly evident as he seeks to attract additional Chinese investors.

"Currently, we want to prioritize investments in building an electric vehicle ecosystem," Jokowi said.

This initiative would commence with mining activities and encompass the entire spectrum, including battery production and electric vehicle manufacturing.

He projected that Indonesia has the potential to manufacture over 2.4 million electric vehicles, encompassing both cars and motorcycles, by the year 2035. During the Chengdu meeting, he underscored the Indonesian government's commitment to offering a streamlined and hassle-free process for Chinese investors.