Tesla supplier CATL’s global expansion gathers pace with US$6 billion Indonesia battery project
- CATL and its Indonesian partners Aneka Tambang and Industri Baterai will build an integrated EV battery project in the Southeast Asian nation’s Maluku province
- The project will include nickel mining and processing, EV battery manufacturing and battery recycling
Tesla supplier Contemporary Amperex Technology (CATL) plans to invest nearly US$6 billion in a battery project in Indonesia, taking another step in expanding its global footprint and positioning itself to meet increasing demand for electric vehicles (EV).
CATL, the world’s largest manufacturer of EV batteries, said in a filing to the Shenzhen Stock Exchange on Friday that its subsidiary Ningbo Contemporary Brunp Lygend (CBL) will partner with two Indonesian companies, Aneka Tambang and Industri Baterai Indonesia, to build an integrated EV battery project in the Southeast Asian nation’s northern Maluku province.
The project will include nickel mining and processing, EV battery manufacturing and battery recycling. Construction is expected to start this year and finish by 2026, according to CATL’s announcement.
“The Indonesia project is an important milestone for CATL as we expand our global footprint, and it will become an emblem of the everlasting friendship between China and Indonesia,” Robin Zeng Yuqun, founder and chairman of CATL, said in a separate statement.
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The project is expected to ensure supply of upstream key resources and raw materials for CATL’s battery production, allowing the company to meet growing demand for EVs and EV batteries because of the rapid transition to green transport to fight climate change.
CATL has been ramping up its overseas expansion to ensure its production capacity can meet demand. The company’s German plant, its first offshore plant, is expected to start production by the end of this year.
In 2020, it also announced another lithium-ion battery plant in Indonesia, which is expected to start production in 2024.
Carmakers sold 6.5 million EVs worldwide in 2021, an increase of 109 per cent from a year earlier, according to research firm Canalys. Global EV sales could reach nearly 15 million in 2025 and over 25 million in 2030, representing 15 per cent of overall sales by the end of the decade, according to the International Energy Agency (IEA).
However, better-than-expected global demand for EVs and spiralling commodity prices have also fuelled an increase in the prices of EV battery materials since last year.
Prices of nickel, lithium and graphite have spiked sharply mainly because of the long development cycles for mining and processing, the ongoing Covid-19 pandemic and the Russia-Ukraine war that broke out in February.
CATL has raised the price of batteries, which account for nearly half of the cost of an electric car, to cope with the surging cost of materials, sustainability data and research provider Miotech said in a report this month.
Carmakers have raised the prices of nearly 30 models sold in China between 1.4 per cent and 13.9 per cent since January, according to Fitch Ratings.
