Indonesia woos Tesla, Chinese and South Korean firms, in bid for electric vehicle battery crown

The country is a key source of the nickel, cobalt and copper that are essential to the manufacture of electric vehicle batteries

However, if it is to be a major producer of lithium-ion cells it must invest in tech, talent and renewable energy

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Published: 12:30pm, 28 Feb 2021Updated: 8:10pm, 28 Feb 2021

As momentum grows for the adoption of electric vehicles in Asia, Indonesia is hoping to become a key part of the supply chain by becoming a major producer of lithium-ion batteries.

Southeast Asia’s largest economy owns one-quarter of the world’s reserves of nickel – a key material in the production of the batteries – and as a country controls the world’s largest reserves, ahead of Australia and Brazil.

Indeed, the country is “a hinterland for many of the raw materials essential for the manufacturing of EV batteries”, not only for nickel, but for cobalt and copper too, according to Andrey Berdichevskiy, director at Deloitte’s Future of Mobility Solution Centre in Singapore.

However, for its plan to succeed, Indonesia needs to address gaps in its own supply chains and “make a broad-based shift towards high-value manufacturing” by investing in advanced industrial technology and talent, Berdichevskiy said.

It also needs a massive injection of money to nurture its fledgling EV battery sector, invest in technology and talent to produce battery-grade nickel, and address a lack of renewable energy that could otherwise put off international carmakers from investing in the country.

Over the past year, Indonesia has pursued the American firm Tesla and explored deals with China’s Contemporary Amperex Technology (CATL) and South Korea’s LG Chem, two of the world’s top producers of EV batteries.