Indonesia Eyes Collaboration with Global Lithium Producers

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Electric Car Battery

Indonesia is looking to partner with global lithium producers like Argentina and Brazil to boost the development of a battery-based electric vehicle ecosystem. By doing so, Indonesia aims to establish a robust supply chain management and become a source of the electric vehicle battery ecosystem.

According to Djoko Widajatno, the Acting Executive Director of the Indonesia Mining Association (IMA), “If we collaborate with the world’s lithium producers such as Argentina and Brazil and we can establish a good supply chain, we can become the source of the industry or the ecosystem of the batteries for our own electric vehicles.” Thursday, April 13, 2023.

Indonesia has realized that its potential nickel market share will decrease following the United States’ policy that excludes Indonesian nickel from the clean energy subsidy package. However, Indonesia still has other potential markets in Africa, Australia, and China.

Djoko Widajatno stated, “We must be able to produce something that is needed by our brothers and sisters in Africa, in Australia who still want to receive our products because what are the components that can be used as batteries? There are four elements in Indonesia that we have, namely nickel, aluminum, cobalt, mn, and one lithium.”

As previously reported, the US government is set to issue tax credit guidelines for battery and EV producers under the Inflation Reduction Act in the coming weeks.

This law includes $370 billion in subsidies for clean energy technology. However, batteries containing components from Indonesia are concerned to be unable to fully qualify for the Inflation Reduction Rate (IRA) tax credit.

This is due to the fact that Indonesia has yet to have a free trade agreement with the US, and Chinese companies dominate the nickel industry in Indonesia.

In light of this, Indonesia is looking to form partnerships with global lithium producers to establish a reliable supply chain for the country’s electric vehicle battery ecosystem.

With a focus on collaboration, Indonesia aims to become a significant contributor to the global electric vehicle industry. Through strategic partnerships, Indonesia hopes to capitalize on its existing natural resources, like nickel, to create a sustainable and profitable battery industry.