Nickel as Capital, Batteries as the Stake: Indonesia's Grand Ambition in the EV Era

Amidst intensifying global competition, Indonesia possesses significant capital as the owner of the world’s largest nickel reserves, a primary component for nickel-based EV batteries. These vast reserves have the potential to propel Indonesia into becoming one of the world’s global battery industry hubs.

Nickel is a vital material in electric vehicle batteries due to its ability to increase energy density. The higher the nickel content, the more energy a battery can store within the same volume.

For electric vehicle manufacturers, this is crucial as it allows vehicles to travel longer distances on a single charge without the need for larger, heavier batteries. Nickel is one of the most essential raw materials for EV batteries, particularly for Nickel Manganese Cobalt (NMC) and Nickel Cobalt Aluminium (NCA) types, which are widely used by global automakers.

According to the USGS, global nickel resources reach over 350 million tonnes, with the majority originating from laterite deposits (54%) and magmatic sulphides (35%). Furthermore, a 2022 USGS study estimates that the world’s seabed holds approximately 4.5 billion tonnes of nickel, indicating massive long-term supply potential.

USGS data predicts that global nickel production will rise by 5% to 3.9 million tonnes in 2025. Indonesia is set to be the primary driver of this growth, with production increasing by approximately 13% to 2.6 million tonnes. This volume will contribute more than 50% of the global supply, reinforcing Indonesia’s position as the world’s largest nickel producer and a major global player.

In contrast, Australian production is expected to plummet by about 54% to 45,000 tonnes due to low nickel prices, while the Philippines is projected to decline by 24% to 270,000 tonnes.

As the demand for electric vehicles and energy storage increases, the global battery industry is also expanding rapidly. After reaching 1 terawatt-hour (TWh) in 2024, demand for rechargeable batteries is expected to surge more than fourfold by 2030 compared to 2023 levels. Projections from McKinsey & Company indicate that global lithium-ion battery demand will jump nearly sevenfold by 2030. The business value is also expected to soar, from US$85 billion in 2022 to over US$400 billion by the end of 2030. The largest surge is expected to come from the active battery materials and battery cell manufacturing sectors, two links in the supply chain currently being contested by many nations. This industry is also expected to absorb 18 million jobs.

The EV battery industry is currently characterised by competition between two main technologies: Nickel Manganese Cobalt (NMC) and Lithium Iron Phosphate (LFP). Although both are lithium-ion based, they possess different chemical compositions, offering distinct advantages and characteristics. This competition is not merely about technology, but also a struggle for supply chain dominance and global industrial influence.

NMC batteries previously dominated due to high energy density, but LFP is aggressively capturing market share. LFP batteries use lithium iron phosphate (LiFePO4) as the cathode material and have a nominal voltage of approximately 3.2 volts. Meanwhile, NMC batteries use a mixture of nickel, manganese, and cobalt as the cathode material, with graphite at the anode. Their nominal voltage is around 3.7 volts, allowing them to produce more energy.

LFP batteries have been a major factor in the decline of global battery prices. By 2025, the average price of LFP battery packs is expected to be more than 40% cheaper than NMC-based batteries per kWh. In 2025, LFP batteries will account for more than 55% of all EVs used globally, though their use remains highly concentrated in China, as Chinese companies lead in production, innovation, and LFP material supply. Looking only at EVs used outside China in 2025, nearly 80% still utilise nickel-based batteries, such as NMC.

One of the primary advantages of sodium-ion batteries is their ability to operate in extreme temperatures. Compared to lithium-ion batteries, particularly LFP, sodium-ion batteries perform much better in cold weather. The latest generation of sodium-ion batteries can maintain approximately 90% of their capacity at -40°C and can continue to operate up to 70°C. For major manufacturers, developing sodium-ion technology is also a strategy to reduce dependence on highly volatile lithium prices, despite the technology’s main weakness being lower energy density.

International Energy Agency (IEA) data shows the global EV market set a new record in 2025, surpassing 20 million units. This is a 20% increase compared to 2024 and represents 25% of total global car sales. This marks the fifth consecutive year that electric vehicle sales have increased by approximately 3.5 million units per year since the Covid-19 pandemic. This growth is primarily supported by Battery Electric Vehicles (BEV), which rely entirely on electricity from batteries as their power source. The BEV market share increased to 65% of total EV sales, rebounding strongly after weakening in the previous two years.

Market developments vary by region. China remains the primary driver of the global EV industry, contributing more than half of the world’s electric vehicle sales growth in 2025. In Europe, sales surged by 30% to over 4 million units, while in the United States, the electric vehicle market share remained below 10%.

A surge in sales is also occurring in Indonesia. Data from the Indonesian Automotive Industry Association (Gaikindo) recorded wholesale BEV sales reaching 103,931 units, a 141% jump compared to the previous year. The market share of electric vehicles has also surpassed 12% of the national vehicle distribution.