Investment totaling IDR 134.7 trillion will be directed towards the production of electric vehicle (EV) batteries within the country, according to Minister of Investment Bahlil Lahadalia.
Lahadalia noted that three investors are collaborating to establish an integrated production facility.
The investment is expected to result in an integrated production facility covering various stages, from mining to EV battery production. Nickel for the battery production will be sourced from Papua.
“The President’s directive is clear, by September, all administrative matters will be completed and groundbreaking will commence,” stated Lahadalia on May 31, 2023.
Collaboration with global investors
The three investors mentioned by Lahadalia are Glencore Ltd from Switzerland, EVision International from the United Kingdom, and Umicore from Belgium.
Glencore Ltd is a multinational commodity mining and trading company based in Switzerland. On the other hand, EVision International is a UK based provider of electric vehicle (EV) solutions, and Umicore is a Belgian materials technology company focused on the development and production of materials for clean mobility, recycling, energy storage and electronics.
Lahadalia mentioned that the potential investment for the development of the integrated factory reaches US$ 9 billion.
The factory will be established in the Bantaeng Industrial Zone, South Sulawesi, and planned to be powered by wind-powered power plant.
Partnership with PT Aneka Tambang Tbk
Lahadalia said that the three investors will collaborate with PT Aneka Tambang Tbk, and that the factory is expected to have an EV battery production capacity of up to 20 gigawatt-hours in the first phase.
“We will focus on the export market to Europe. EVision from the UK will serve as the hub for Europe,” said Lahadalia.
Previously, investments were also made by LG, a Korean company, with a total investment value of US$ 8.9 billion.
Additionally, Contemporary Amperex Technology Co Limited (CATL) from China invested US$5.2 billion.
Several other European automotive companies have also agreed to invest in the electric vehicle production sector, including Volkswagen and BASF, both based in Germany.
Boosting Indonesia’s economy and EV industry
The new investment in domestic EV battery production will have significant implications for Indonesia’s economy. It aligns with the country’s efforts to become a major player in the global electric vehicle market.
The establishment of the integrated production facility will enhance the value chain of EV battery production, from raw material extraction to final product manufacturing.
The collaboration with international investors will not only bring in substantial capital but also facilitate knowledge and transfer of technology.
The use of nickel from Papua underscores Indonesia’s abundant natural resources, positioning the country as a key player in the global nickel industry.
This investment will further leverage Indonesia’s position in the EV battery market, as the demand for electric vehicles continues to grow worldwide.
With the establishment of the Bantaeng Industrial Zone, which prioritizes renewable energy sources such as wind power, the production facility will contribute to Indonesia’s commitment to sustainable development and to reduce reliance on fossil fuels.
The investment in domestic EV battery production signifies Indonesia’s determination to become a leading player in the electric vehicle industry. Furthermore, the investments will open up opportunities for job creation, technology advancement, and economic growth.
The partnership with global investors and the participation of reputable automotive companies demonstrate the confidence in Indonesia’s potential as an emerging market for electric vehicles. Additionally, giving Indonesia a hub in various markets such as Europe.
As the government aims to accelerate the development of electric vehicles, the investment in domestic EV battery production sets a solid foundation for Indonesia to achieve its goals of sustainable transportation and a greener future.