Indonesia is poised to significantly increase its production capacity for electric vehicle (EV) battery materials, potentially reaching 1,143 gigawatt hours (GWh), thanks to four new smelters set to commence operations. Agus Tjahajana Wirakusumah, Special Staff to the Minister of Energy and Mineral Resources for Industrial Development Acceleration, highlighted the rapid growth of Indonesia's EV battery industry in recent years. According to Agus, several companies are preparing to produce intermediate products such as Mixed Hydroxide Precipitate (MHP) or nickel sulfate. "Four companies will soon be operational, with one under construction, another in the licensing process, and two in the feasibility study phase," Agus said on 29 July 2024.
This anticipated production capacity is a significant achievement, given Indonesia's relatively recent entry into the EV battery ecosystem. Agus also noted that global demand for batteries is expected to reach 5,300 GWh by 2025, primarily driven by the demand for four-wheel EVs, followed by two-wheel EVs, buses, battery energy storage systems, and various electronic goods and applications. The majority of EV battery demand is concentrated in three regions: the United States, the European Union, and Asia. Agus projected that the demand for nickel-based batteries would continue to rise, potentially accounting for 40-50% of the market by 2035. This expansion in battery production underscores Indonesia's strategic role in the global EV supply chain, leveraging its rich nickel resources to become a key player in the burgeoning electric vehicle market. The growth of this sector is expected to provide significant economic benefits and enhance the country's industrial capabilities.
