by Nurul Fitri Ramadhani
The Indonesian government is wooing foreign investors to help develop the electric vehicle (EV) ecosystem as the Southeast Asian country is on track of a green energy transition.
"We are very confident that investing for EVs in Indonesia will be profitable, because we are rich in natural resources needed for the EV ecosystem, including nickel. And we have a huge market here," the country's Industry Minister Agus Gumiwang Kartasasmita said recently in a statement.
As of January 2020, Indonesia had 72 million tonnes of reserves of nickel ore, a primary component of EV batteries, according to data from the Ministry of Energy and Mineral Resources.
That accounted for 52 percent of the total amount of nickel ore around the world, making Indonesia one of the world's largest nickel producers. The country's nickel production reached 2.47 million tonnes in 2021.
Recently, Indonesia has been publicly wooing U.S. electric car manufacturer Tesla to invest in the country. Indonesian President Joko Widodo met with Tesla Inc. CEO Elon Musk in Texas last week to discuss potential investment in Indonesia's nickel industry and supply of EV batteries.
Investment Minister Bahlil Lahadalia said, without providing more details, that the deal with Tesla was done and the project might begin this year at the Batang Integrated Industrial Estate in Central Java province.
The minister told all potential investors that production costs in Indonesia would be much cheaper compared to other countries, and that the government would make related procedure easier for investors.
"All permits will be handled by the government through the Ministry of Investment, but they do not need to come. And we will provide some incentives needed, as long as that does not violate any law," he said.
A similar investment has already been finalized by the Chinese battery manufacturer Contemporary Amperex Technology Co., Limited (CATL). The company was reported to invest nearly 6 billion U.S. dollars for battery production in Indonesia, which will include nickel mining and processing, and battery production and recycling.
Last September, South Korea's Hyundai Motor Group and LG Energy Solution began the construction of a battery cell factory in Indonesia, which is planned to start operation in the first half of 2024.
Minister Lahadalia said German companies Volkswagen and BASF had also expressed their interest in investing in Indonesia's battery industry.
Head of the association of Indonesian automotive manufacturers GAIKINDO, Jongki Sugiarto, said all investments related to the EV industry, particularly in terms of production, were expected to make the electric car prices in the Indonesian market more affordable for middle-class people.
"More EV manufacturers means more variations of electric cars offered in the market. That will make the prices of electric cars cheaper and more affordable," he said.
Editor: Galia
