Following the news that State-owned Indonesia Battery Corporation (IBC) and South Korea’s LG will build a new US$1.2bn battery plant in Indonesia;

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:

“With one-fourth of the global nickel ore reserves, a key battery material, Indonesia holds significant potential for electric vehicle (EV) battery manufacturing. The country failed to realize its potential early, but in the recent past it has made significant progress to establish itself in the electric vehicle battery supply chain.

“Soon after launching Indonesia Battery Corporation (IBC), a partnership of  four state-owned companies in March 2021, the entity is ready to build a new battery plant in partnership with South Korea’s LG, a seasoned international EV battery maker. A production capacity of 10 GWh is aimed in the first phase, which will be largely used for Hyundai’s planned EV production in Indonesia.

“The drive towards building sustainable EV supply chain in Indonesia is on a fast-lane, as there has been increased investments in Nickel and Cobalt smelting projects to cater to the local EV battery production needs. China’s Huayou Cobalt Co., which is a part of LG EV battery consortium in Indonesia, has also partnered with battery maker EVE Energy to set up US$2.08bn Nickel and Cobalt smelting plants in Indonesia.

“The developments give optimism for Indonesia’s secure future in the EV market. With a robust local EV supply chain, Indonesia is expected to be better positioned than its competitors Thailand and Malaysia in mid- to long-term. The government’s foray into EV material battery supply & battery manufacturing along with conducive policies will take Indonesia close to its ambitious production target of 20% EVs and HEVs (total production) by 2025. Additionally, the plant will also boost LG’s competitiveness in the global EV battery market, which is also potentially looking at new production sites in the US and Europe.”