Economist confident nickel-based EV incentives will bolster battery industry

Energy economist from Universitas Gadjah Mada (UGM), Fahmi Radhi, said the nickel-based electric vehicle (EV) incentives being prepared represent a critical opportunity to bolster the national battery industry and deepen mineral downstreaming. He stated on Tuesday in Jakarta that the policy is a key instrument to steer the development of the national EV industry towards greater integration with domestic resources. ‘The government is now being more selective. Incentives for nickel-based vehicles are positive, as we have nickel production that can drive downstreaming into the national EV ecosystem,’ Radhi said. He added that the policy of differentiating between nickel-based and non-nickel vehicles is more targeted compared to previous measures, including the gradual reduction of incentives for completely built-up (CBU) imported EVs. However, the market remains dominated by lithium iron phosphate (LFP) EVs, whose technology and raw materials are not yet produced domestically. According to Gaikindo’s wholesale data, LFP EV sales reached 46,814 units, or 83.3% of the market in 2024, while nickel-manganese-cobalt (NMC) vehicles accounted for 9,390 units (16.7%). In 2025, LFP’s dominance is expected to decline to 77.2% (88,344 units), with NMC rising to 22.8% (26,069 units).