Indonesia and China have officially signed a cooperation agreement to establish a joint venture that will produce electric vehicle (EV) battery cells in Indonesia.
This collaboration is in partnership with Contemporary Amperex Technology Co. Ltd. (CATL) from China, with a planned investment of USD 1.2 billion in battery production in the Southeast Asian region. CATL, through its subsidiary CBL International Development, will work together with the Indonesia Battery Corporation (IBC), which is owned by the government, in this project, as announced by both parties.
The signing of the interim agreement and the deed of establishment for the joint venture took place in Jakarta on Wednesday, October 16.
The project, which will be built in Karawang, West Java, aims to increase battery production to 15 gigawatts per year. The development of this project will be carried out in stages, with plans for the factory to begin operations in 2027.
Strengthening the EV Supply Chain
This initiative signifies significant progress for Indonesia in building the electric vehicle supply chain, in line with President Joko Widodo's goals for the end of his term. The government is striving to attract foreign investors by leveraging its abundant nickel reserves, which are crucial for the production of several types of batteries.
In addition to signing the cooperation agreement with CATL, IBC earlier this month also formalized a partnership with Nuode New Materials and China Hualong International Construction Corporation (Sinoron) to develop the downstream processing of copper, an essential raw material for EV batteries.
Furthermore, the presence of global players such as Hyundai Motor Group, which has opened the first battery cell factory in Indonesia, as well as LG Energy Solution Ltd. and BTR New Material Group, which launched an anode material factory earlier this year, is further strengthening the electric vehicle battery industry ecosystem in the country.
Leading Global Nickel Supplier
In the past decade, Indonesia has experienced significant growth in the nickel mining sector. From just two nickel smelters, the number has exponentially increased to 27 smelters, with more than 20 additional smelter projects still in development.
The world's largest nickel producer by 2023
This rapid growth has positioned Indonesia as the largest supplier of nickel ore in the world, contributing half of the total global supply in 2023. According to data from the United States Geological Survey (USGS), nickel production in Indonesia reached 1.8 million metric tons in 2023, accounting for 50% of total global nickel production.
