Indonesia has opened Southeast Asia’s first electric vehicle (EV) battery plant, with robotic arms building nickel-based cells in West Java. This $1.1 billion factory, funded by Hyundai and LG, is anticipated to help Indonesia achieve its goal of becoming a regional EV production powerhouse.
Former President Joko Widodo stated that such investments might position Indonesia as a vital player in the global EV supply chain by exploiting its world-class nickel reserves. However, analysts point out obstacles such as limited manufacturing capacity, environmental issues, and competition from alternative batteries such as lithium iron phosphate (LFP).
Indonesia trails Thailand, which has approximately 79% of Southeast Asia’s EV market share, by 8%. However, the government is incentivising EV growth with policies like a luxury goods tax exemption and duty-free imports for enterprises that begin production by 2027.
Key automakers such as Hyundai, BYD, and VinFast have entered Indonesia’s 280 million-strong market, selling over 23,000 battery-powered vehicles between January and August 2024.
Industry leaders, including Hyundai’s Fransiscus Soerjopranoto, emphasised their dedication to making Indonesia an EV powerhouse. However, environmental and market challenges persist, particularly as demand for more economical batteries increases.
