Three days ago, Indonesia's President Joko Widodo officiated the groundbreaking ceremony of PT HKML Battery Indonesia, Southeast Asia's first EV battery cell manufacturer.
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This ceremony was attended by, among others, several investments-related Ministers, Hyundai Motor Group Chairman & CEO Chung Eui-Sun, LG Energy Solution CEO Kim Jong-un, and PT HKML CEO William Wong.
PT HKML Battery Indonesia is a joint-venture company between Hyundai Motor Group, LG Energy Solution, and the Indonesian private sector.
By this move, Indonesia, the sleeping giant of Southeast Asia, showed further interest in becoming a key player in the emerging EV market. In his speech, the president was quoted as stating that this factory’s construction was a form of the government’s seriousness in implementing industry downstreaming.
The seed for this interest was actually sown in 2012 by Indonesia's then Minister of State-Owned Enterprises Dahlan Iskan. He was a major proponent of a national EV industry during his tenure, and became personally involved in several efforts to lay a foundation for national EV developments.
The succeeding central government was slow to take up the concept, but several key people, influenced by Mr. Iskan’s vision, began pushing in this direction. This seemed to be the logical course of action, to take advantage of Indonesia’s vast nickel resources, the largest of any country at a quarter of the world’s reserve. As we know, nickel is currently a major component for battery cell productions.
Finally in March 2021, a big milestone was achieved through the formation of IBC (Indonesia Battery Corporation), a holding company consisted of four giant State-Owned Enterprises:
- INALUM - National mining holding company
- Aneka Tambang - National mineral processing company
- Pertamina - National gas and oil company
- PLN - National electricity company
IBC’s goal was for Indonesia to have an integrated battery industry, consisting of mining, smelting, precursor material production, battery cell & battery pack production, grid energy storage & stabilizing, and recycling. Projected capital investments were estimated to be in the region of US$17 billion.
This seemingly ideal environment for efficient large-scale battery manufacturing was leveraged by the Indonesian government to attract foreign industry leaders, offering mutually beneficial investment opportunities with clauses for transfer of technologies. Apparently the industry leaders responded favorably. IBC reportedly established partnerships with CATL and LG Chem, battery giants from China and South Korea, respectively.
Currently being expanded is IMIP (Indonesia Morowali Industrial Park), a nickel-based industrial area nearby the Morowali nickel mines, consisting of nickel smelters and processing clusters. IMIP is in the middle of opening new clusters for the production of nickel-cobalt and nickel-sulfide battery cathodes.
The next few years could be the start of EV production capacity diversification in the East Asia region. Previously, this region’s EVs and their main components had mostly been produced in Japan, South Korea, and China.
Yonathan Santoso is an autotech service supervisor mentoring a small team of technicians in maintaining and repairing a wide variety of road vehicles. He loves electric cars and reports electric vehicle news at Torque news. Yonathan can be reached on Twitter at @MbahMobil.
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