BKPM: Indonesia Offers Investment Opportunities in EV Battery Development

Indonesia is opening up investment opportunities to develop a national electric vehicle (EV) battery manufacturing ecosystem worth 121 billion US dollars, according to Ahmad Faisal Suralaga, Director of Downstreaming Strategy and Governance at the Ministry of Downstreaming and Investment/BKPM. Speaking at the Korea-Indonesia Economic Partnership Forum in Jakarta on Wednesday, Ahmad said Indonesia offers abundant natural resources that serve as the foundation for battery and EV manufacturing. “Six main materials are needed to make EV batteries, and four of them are found in Indonesia. We have nickel, bauxite, manganese, and copper, which are critical materials in the EV battery supply chain. This advantage provides Indonesia with a strong foundation to develop mineral and battery material processing into battery and EV manufacturing,” Ahmad stated. Indonesia is the world’s largest nickel producer, holding 42 percent of global resources. Beyond nickel, the country has developed 28 other commodities with competitive advantages through its downstreaming strategy. With these investment opportunities, Indonesia aims to build a robust EV battery industry focusing on the supply chain through to battery packaging. “By 2045, Indonesia intends to become one of the world’s top five EV battery producers. This is possible because downstreaming creates the highest added value; for example, nickel’s value can increase 67-fold if we can transform it into EV batteries,” he added. Investment is focused on constructing advanced smelters to produce high-value final products and EV battery cell manufacturing. Indonesia is currently one of the few countries with an integrated industry across the entire supply chain, and many major EV battery players have already entered the market. The downstreaming ecosystem also serves as Indonesia’s primary capital in developing the EV battery industry, potentially reducing costs by eliminating gaps in the production network such as export duties and taxes, with resources available in a single country. Ahmad noted that through investment and the downstreaming approach, the country’s investment value could reach 618 billion US dollars, boost export value by approximately 857 billion US dollars, and create more than 3 million jobs. Investment in Indonesia by various countries is still dominated by the mineral sector at around Rp98.3 trillion, followed by plantation and forestry at Rp29.8 trillion, oil and gas at around Rp17.6 trillion, and the marine sector at around Rp1.7 trillion.