Indonesia Ready to Become Player in Electric Vehicle Supply Chain

The plan to develop the electric vehicle battery industry ecosystem shows the world that Indonesia will make significant contributions to the global electric vehicle supply chain.

Kompas/Priyombodo

An officer tries to charge a car during the launch of the General Electric Vehicle Charging Station (SPKLU) at the PLN Main Distribution Unit for Greater Jakarta in Jakarta, Tuesday (29/10/2019).

JAKARTA, KOMPAS — Indonesia is seeking to become a major player in the global electric vehicle supply chain by building an integrated electric battery ecosystem from upstream to downstream. The ambitious program will be supported by the country’s plan to develop the technology independently and establish a strong domestic market.

The initial step of the program will be marked by the construction of an electric vehicle battery cell plant in July 2021. The factory, which will be located in Karawang, West Java, will be built by PT Indonesia Battery Corporation (IBC), which consists of four state-owned enterprises, in cooperation with a consortium led by the LG Group of South Korea.

The electric vehicle battery cell plant is scheduled for commercial operation by the end of 2023, with an initial production capacity of 10 gigawatts per hour (GWh). IBC and the LG consortium plan to invest up to US$9.8 billion, or about Rp 142 trillion, for the development of an integrated vehicle industry that consists of both upstream and downstream activities.

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"This will be Indonesia\'s biggest investment project after the reformation and will cover upstream and downstream industries from mining and smelting operations, precursors, cathodes, cell batteries, to the recycling industry. They will be integrated domestically," Investment Minister Bahlil Lahadalia said in a webinar held by the University of Indonesia in Jakarta on Thursday.

According to Bahlil, the plan to develop the electric vehicle battery industry ecosystem shows the world that the country will make significant contributions to the global electric vehicle supply chain. In addition, for electric vehicles, battery calls can also be used for the energy storage system industry.

In addition to the LG consortium, state-owned firm PT Antam will team up with an electric vehicle battery manufacturer from China, Contemporary Amperex Technology (CATL) to develop a electric vehicle battery manufacturer factory in Indonesia. Like LG, CATL is a major player in the world\'s electric vehicle industry. The Chinese company plans to invest a total of $5.2 billion, or about Rp 75.03 trillion, in developing the factory.

KOMPAS/TOTOK WIJAYANTO

An officer removes an electric motorcycle battery during a test run at the general electric vehicle battery exchange station (SPBKLU) in Jakarta, Monday (31/8/2020).

The president director of PT IBC, Toto Nugroho, said the development of the integrated vehicle battery cell industry would be completed within three to four years. The four state-owned companies, namely PT Aneka Tambang or Antam, Mind ID, PT Pertamina and electricity firm PLN, which jointly own IBC, will also will participate at each stage of the supply chain.

PT Antam and Mind ID will play a role in the mining process, while Mind ID and Pertamina will be in charge in the production of cathodes and precursors. Pertamina and PLN will also be involved in the production of battery cells.

"In 2024, it is hoped that our HPAL (nickel ore processing) smelter and precursor and cathode factories will begin operation so that by 2025 we can have our own electric vehicle battery cell plant. Indeed, there is still a long time to go, but we have prepared the foundation,” said Toto.

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Meanwhile, in Morowali, Central Sulawesi, the manager of the PT Indonesia Morowali Industrial Park is ready to contribute to the development of the electric vehicle battery cell plant program. Four companies in the region will produce raw materials for electric vehicle batteries, which have been widely used globally because of their low emissions. However, environmental and social impacts to be caused by the nickel mining companies must still be considered.

"The four companies that will produce raw materials for electric vehicle batteries are part of our support for the government\'s program to develop national electric vehicles," said spokesman for PT Indonesia Morowali Industrial Park, Dedy Kurniawan. One of the four companies, namely PT Huayue Nickel Cobalt, is scheduled to begin operation by the end of 2021.

The company is based in China. The other three companies plan to begin operation in 2023. Currently, the three are still processing their operational permits and preparing infrastructure facilities.

This article was translated by Hendarsyah Tarmizi.