Indonesia to start building EV ecosystem in June

Market: Battery materials, Metals
04/06/25

Indonesia will this month start building a fully integrated electric vehicle (EV) battery ecosystem, costing $6bn-7bn. The project will include all aspects of EV battery production, from mining down to battery cell manufacturing, energy and mineral resources minister Bahlil Lahadalia said on 3 June.

Some European countries have asked for battery cell facilities to be built close to automotive hubs, but it could be a "win-win" situation if midstream production — such as manufacturing of precursors and cathodes — were to take place in Indonesia, Bahlil said .

"The benefit can't all go overseas while Indonesia bears the costs. The nickel downstream ecosystem and industrial infrastructure are already in place here," Bahlil said.

Top South Korean battery firm LG Energy Solution (LGES) earlier this year pulled out of an integrated EV battery project in Indonesia, citing market conditions and the current investment environment. But Bahlil later denied that LGES exited the project on its own accord, saying instead that it pulled out on the Indonesian government's request.

"The truth is that I was the chairman of the task force at that time, then decided to cancel what LG did because it took too long," Bahlil said last month. Major Chinese cobalt refiner and nickel-cobalt-manganese precursor producer Huayou Cobalt will "replace" LGES in the project, Bahlil added.

Battery electric car registrations in Indonesia rose to 49.2mn units in 2024 from around 17mn units a year earlier, according to energy watchdog the IEA. The share of electric cars in the country's sales mix more than tripled on the year to 7pc in 2024, with Chinese-origin electric cars increasing massively in popularity. The share of EV imports from China rose to 68pc in 2024 from a 11pc in 2023.

French nickel mining group Eramet last week signed an initial agreement to develop a "sustainable and integrated" EV battery raw materials industry with Indonesia's sovereign wealth funds, investment management agency Danantara and the Indonesia Investment Authority.

By Joseph Ho

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