Indonesia's EV Market
The Indonesian government is actively encouraging the development of electric vehicles in the domestic automobile industry to pursue energy conservation and eco-friendliness.
Indonesia at a Glance
EV Market in Indonesia
Indonesia aims to become a major player in the global electric vehicle (EV) market, with a goal of producing and exporting EV batteries, alongside a target of 140 gigawatt-hours (GWh) by 2030. The country, which has abundant nickel reserves, plans to reduce emissions by promoting the development of a domestic EV market. To achieve this, Indonesia is managing foreign investors' access to nickel reserves, offering incentives to EV battery and component producers, as well as EV manufacturers and buyers, to create a complete EV ecosystem.
Indonesia LFP Market
Indonesia's abundant nickel resources have allowed for the production of EV cars and batteries. However, nickel-based batteries are costly, and consumers may favor cheaper EVs with LFP batteries. This may present a challenge to the development of Indonesia's electric vehicle ecosystem, as future EV manufacturers may prefer Chinese-made LFP batteries over locally-made nickel-rich batteries. As a result, Indonesia is now looking to develop a lithium battery ecosystem in addition to its existing nickel resources.
Nickel in Indonesia
Indonesia is a significant producer of nickel and cobalt, which are crucial transition metals. Being the largest global producer of nickel, Indonesia is seeking to reinvigorate its nickel battery industry by attracting foreign investment. The objective is to add value to the mined nickel ore by creating a domestic supply chain for batteries rather than solely relying on exporting the raw materials.
Carbon Reduction
Many countries around the world are setting goals to reduce carbon emissions and exploring different approaches.
Indonesia is aiming to decrease the country's carbon footprint in the transportation sector by transitioning to electric vehicles. This transition is made possible by the abundance of domestic mine reserves needed for battery production. By adopting battery-powered cars and motorcycles, Indonesian cities could see improved air quality and reduced noise levels, making them more livable.
Supply chain changes
In March 2021, the Indonesian government established the Indonesia Battery Corporation (IBC).
Foreign EV battery companies investing in Indonesia are required to partner with IBC as part of the government's strategy to develop an integrated EV battery supply chain.
IBC aims to prioritize the development of electric motorcycles and other electric vehicles, as Indonesia seeks to reduce its carbon footprint in the transport sector and leverage its domestic mine reserves for battery production.
Battery Swapping
Battery swapping stations allow devices to exchange their discharged battery pack for a fully charged one as an alternative to plugging the vehicle into a charging station. Battery swapping technology successfully deployed in various applications, such as electric buses and forklifts.
Cost saving
In an effort to reduce the cost of electric vehicles, some manufacturers are considering selling them without batteries However, the option to purchase an electric vehicle without a battery will depend on the specific model and manufacturer.
Players
Gogoro, a Taiwanese manufacturer of electric mopeds, currently operates the world's largest battery swapping network, with nearly 11,000 GoStations located in Taiwan and 250 in China.
Nio, a Chinese luxury carmaker, is the only major provider of automobile battery swapping stations for the public. Nio has built around 1,000 battery swapping stations in China and Europe, with the swapping process taking only three minutes to complete.
Subsidies
Indonesia is promoting a subsidy program to boost domestic sales of electric vehicles (EVs) as part of a broader effort to accelerate electric vehicle (EV) adoption and attract investment from major car and battery manufacturers.
