Experts: Nickel EV Incentives Could Accelerate Mineral Downstreaming
REPUBLIKA.CO.ID, JAKARTA – The government’s plan to provide enhanced incentives for nickel-based electric vehicles is viewed as a move that could accelerate mineral downstreaming and strengthen Indonesia’s position in the global electric vehicle battery supply chain.
Executive Director of the Centre for Energy and Mining Law Studies, Bisman Bakhtiar, considers the policy a strategic step to increase the value of nickel resources, which have long been one of Indonesia’s key commodities.
In his view, Indonesia must ensure that its nickel resources do not stop at mining and raw material exports but are processed into higher-value products such as EV batteries.
“This incentive is crucial for boosting downstream value. Without robust policies, we will merely remain a raw material supplier despite having the world’s largest nickel reserves,” Bisman said in Jakarta on Tuesday, 26 May 2026.
He added that incentive policies must align with strengthening the Domestic Component Level (TKDN) regulations to ensure economic benefits extend beyond increased EV sales and foster domestic component and battery industries.
Bisman stressed Indonesia must capitalise on the global EV industry’s momentum to become a key player in the battery value chain.
“We must not merely be a market; we need to be a major player. Incentive policies and other facilitations must align with strengthening domestic component industries,” he said.
Bisman also noted nickel-based batteries, or nickel manganese cobalt (NMC), still have strong prospects in the global EV market. These batteries are superior for high-performance vehicles requiring longer ranges.
“NMC’s prospects remain excellent due to its advantages. Despite the rise of LFP technology, nickel retains a strategic position in the global EV market,” he added.
Previously, Finance Minister Purbaya Yudhi Sadewa stated the government is preparing an EV incentive scheme with a 100% government-covered Value Added Tax (VAT) for nickel-based EVs, while non-nickel EVs would receive a 40% VAT subsidy.
The government is also offering a subsidy of Rp5 million per electric motorcycle unit. The programme aims to target around 200,000 EV units and will commence in June 2026.
“For cars with nickel batteries, the VAT is fully covered by the government. For non-nickel ones, it’s less. This is to support nickel downstreaming here so our nickel is properly utilised,” Purbaya said.
Efforts to downstream nickel into the EV battery industry continue, including a battery plant project developed by Indonesia Battery Corporation in Karawang.
The facility is built through a partnership with Contemporary Amperex Technology Co. Limited and Ningbo Contemporary Brunp Lygend via a joint venture named Contemporary Amperex Technology Indonesia Battery. The plant, set to commence operations in July 2026, has an annual production capacity of 6.9 gigawatt hours (GWh) and is expected to be a key pillar in developing the national EV battery ecosystem.
The facility’s presence is seen as a concrete step to strengthen nickel downstreaming and boost Indonesia’s competitiveness in the global EV industry.