German car manufacturer Volkswagen (VW) intends to conduct a feasibility study in the coming months for the establishment of an US$5 billion-electric vehicle (EV) battery plant in Indonesia, a senior government official said.
Secretary general at the Indonesian Investment Coordinating Board (BKPM) Ikmal Lukman said on Sunday (28/5) that the plant’s construction is targeted to start this year. Although the company has chosen a location for the plant, he declined to reveal any details.
“[The plant] will supply the world’s demand for battery components. This is a matter of pride for us as we have been trusted,” Lukman said, noting that the plant would not only produce EV batteries, but also electric cars.
Collaborates with national and foreign companies
Through its subsidiary PowerCo, VW has also intended to collaborate with several national and foreign companies to realize this big project.
As Minister Bahlil Lahadalia said last month, VW will work with Vale, Ford, Huayou, French miner Eramet and several Indonesian companies such as Merdeka Gold Copper, and Kalla Group to build an EV battery ecosystem in Indonesia.
Unveiling VW’s investment plan in Indonesia
VW’s investment plan in the EV ecosystem in Indonesia was revealed during President Jokowi’s visit to Hannover, Germany, in April 2023. Jokowi met with PowerCo CEO Frank Blome to discuss the company’s investment plans.
Apparently, PowerCo expressed its intention to collaborate with various companies, particularly those that had secured nickel concessions in Indonesia. Later, PowerCo will contribute nickel processing technology into semi-finished materials, including the smelter development.
PowerCo has also forged a new partnership with PT Merdeka Battery Materials Tbk (MBMA) in Indonesia, to develop an integrated vehicle battery industry.
PowerCo’s ambition to pursue global EV domination
PowerCo has set an ambitious goal to establish VW as the leading global producer of EVs by gaining control over the supply of nickel and its refined products. This objective entails competing directly with Chinese companies that have previously secured nickel concessions in Indonesia.
Currently, PowerCo holds a dominant position by supplying 80 percent of the batteries utilised in EVs manufactured by the VW group, which includes renowned brands such as VW, Skoda, Audi, and Bentley.
Moreover, this partnership extends to luxury supercar manufacturers like Lamborghini and Porsche, both of which are set to introduce electric vehicle product lines.