JAKARTA, Oct 18 (Reuters) – Indonesia is set to take a significant step in the electric vehicle (EV) supply chain by exporting nickel-based materials used in EV batteries to the United States next month, according to the country’s energy minister Bahlil Lahadalia. This shipment is specifically aimed at Tesla (TSLA.O), a leading U.S. electric carmaker, further highlighting Indonesia’s ambitions to become a key player in the global EV industry.
In a statement made on Friday, Lahadalia confirmed that the country would be exporting the material known as an EV battery precursor to Tesla from Weda Bay, an area rich in nickel deposits. However, specific details on the volume of materials to be exported were not provided.
“We will export precursor to the U.S. by next month to Tesla, from Weda Bay,” the energy minister stated, without giving further information on the scope of the export.
Nickel Resources and Indonesia’s Growing EV Industry
Indonesia, home to one of the world’s largest nickel reserves, has positioned itself as a major source of the metal for the growing electric vehicle market. Nickel is a key component in the production of EV batteries, especially the higher energy-density lithium-ion batteries that power most electric cars today.
To ensure long-term benefits from its abundant nickel resources, Indonesia has taken strategic steps to retain value by processing raw materials within the country. This includes banning the export of unprocessed nickel ore and encouraging foreign investments to set up refining, battery production, and electric vehicle manufacturing plants within its borders.
In the summer of 2022, a high-ranking Indonesian cabinet minister revealed that Tesla had signed contracts worth around $5 billion with several nickel-processing companies in Indonesia. However, when approached, Tesla did not respond to Reuters’ inquiries regarding these agreements, and the automaker also declined to comment on the most recent statement from Indonesia’s energy minister.
A Hub for International Investment in E-Mobility
Indonesia’s strategy to become an integral part of the global EV supply chain is already bearing fruit. Numerous international corporations have announced, or are already involved in, substantial e-mobility projects in the country. For example, Hyundai and LG Energy Solution (LGES) launched a battery cell manufacturing plant in Indonesia during the summer of 2023. In addition to their battery production venture, Hyundai opened a vehicle manufacturing plant in Indonesia in 2022, further solidifying its presence in the Southeast Asian nation.
Other automotive giants like Toyota and Chinese electric vehicle manufacturer BYD have also shown interest in building electric cars locally in Indonesia, boosting the nation’s reputation as a growing hub for EV production.
In a related development, CATL, the Chinese battery giant, has also been active in Indonesia. A subsidiary of CATL formed a joint venture with Indonesia Battery Corporation (IBC), a state-owned entity, aimed at boosting the country’s battery cell production capabilities.
Tesla’s Indonesia Ambitions Still on Hold
Although Tesla’s interest in Indonesia has long been speculated, particularly with rumors of a potential manufacturing plant in the country, no official announcements or developments have materialized. The prospect of Tesla building a facility in Indonesia would align well with the company’s strategy to diversify its battery supply chain, particularly in regions rich in raw materials like nickel.
For now, the export of nickel-based precursors to Tesla from Indonesia marks an important milestone, but whether this collaboration will expand into further manufacturing projects within the country remains uncertain.
