Gary Zhou 
Indonesia’s Minister of Investment, Bahlil Lahadalia, recently stated that Volkswagen plans to build an electric vehicle (EV) battery ecosystem in the Southeast Asian country.
The German automaker is partnering with miner Vale, Ford, and Chinese battery minerals producer Zhejiang Huayou Cobalt to build the EV ecosystem. French miner Eramet and local Indonesian companies Merdeka Gold Copper and Kalla Group also joined the partnership.
Indonesia is a prime candidate for building an EV battery ecosystem, considering it has one of the largest nickel reserves in the world. The Southeast Asian country also has cobalt reserves. However, nickel remains one of the top minerals used for EV battery production.
In 2022, Indonesia announced its aim to develop an integrated electric vehicle supply chain. The integrated EV supply chain was a step toward Indonesia becoming an EV battery producer and exporter. It set an ambitious goal to make batteries with a capacity of 140 GWh by 2030.
Economic Times reported automakers are courting Indonesia because of its raw material supply for EV batteries. Raw minerals, like nickel, account for at least 40% of an EV vehicle’s sticker price. In Tesla’s Master Plan Part 3, nickel can be used in the cathodes for electrified commercial/passenger vans, large sedans/SUVs/trucks, and long-range heavy trucks like the Tesla Semi.
Indonesia seems well aware of its raw minerals’ value. The SE Asian country is expected to propose a limited free trade agreement (FTA) for specific battery-related materials shipped to the United States. The proposal would allow companies that use raw minerals from Indonesia to meet the Inflation Reduction Act’s (IRA) battery qualifications for EV tax credits.
