China’s largest battery maker CATL plans to build a US$5 billion Indonesia plant as Widodo extends overture to Elon Musk

Contemporary Amperex (CATL) plans to build a US$5 billion plant in Indonesia to make battery packs for electric vehicles

CATL signed an agreement with Indonesian state miner PT Aneka Tambang to ensure that 60 per cent of the lithium mined is processed in the country into battery packs

Reading Time:3 minutes

Workers checking products at Contemporary Amperex Technology’s factory in the Fujian provincial city of Ningde on September 11, 2019. Photo: Xinhua

Published: 7:45pm, 16 Dec 2020Updated: 10:44pm, 16 Dec 2020

Contemporary Amperex Technology (CATL), China’s largest producer of automobile battery packs, plans to build a US$5 billion plant in Indonesia to establish a beachhead in the world’s fourth-most populous nation as electric vehicles gain popularity.

The lithium-ion battery assembly in Indonesia will be the second offshore production line for CATL, based in the Fujian provincial city of Ningde, following its US$2 billion plant in Germany that will supply BMW when it begins production in 2021.

The new plant will start production in 2024, the country’s deputy minister at the coordinating ministry of maritime and investment affairs Septian Hario Seto said during a virtual briefing on Tuesday without disclosing its exact location, according to Reuters. CATL’s executives would not comment on the investment plan.

The plan by CATL was announced following a personal invitation by the Indonesian President Joko Widodo for Tesla to build an electric vehicle assembly in his country. During a December 11 phone call with Tesla’s chief executive Elon Musk, Widodo discussed the industry and the main components for EV batteries, Indonesia’s investment ministry said in a statement. The president also asked Musk to consider Indonesia as a potential launch site for SpaceX, his aerospace manufacturing and space transport venture.

A worker outside a factory of Contemporary Amperex Technology in the Zhejiang provincial city of Ningde on December 16, 2016. Photo: Reuters

“Chinese electric vehicle components suppliers, particularly the battery makers, need to plan ahead for a boom in sales of the cars over the coming years,” said Gao Shen, an independent analyst on manufacturing sectors in Shanghai. “Indonesia is the place where rich resources of nickel laterite ore attract CATL to make investment.”