President Jokowi’s EV Ambition Takes A Step Forward With Cathode Plant

President Jokowi’s ambition of expanding Indonesia's electric-vehicle (EV) supply chain has taken another step forward with the announcement of plans for a cathode plant, Bloomberg reported.

The facility is being built as part of a US$9.8 billion (RM44.58 billion) grand package to build onshore battery production by Indonesian state miner Aneka Tambang, Indonesia Battery Corporation, and a consortium led by South Korea's LG Energy Solution Ltd, according to a statement issued by Indonesia's Investment Ministry on Thursday (Aug 3).

The Southeast Asian country is the world's largest source of nickel, a key material for high-performance batteries, and it hopes to capitalise on that advantage by establishing an EV industry on its own soil. Indonesia has seen a rush of investment in nickel smelters, which has been followed by plans for a cathode precursor facility. A cathode plant would help the country move up the value chain.

Construction on the cathode plant will begin this year after the companies resolve the most difficult part of the negotiation involving shareholdings, according to LG Energy CEO Young Soo Kwon in a ministry statement.

The group of companies is also constructing a nickel smelter, a cathode precursor factory, and a US$1.1 billion battery cell factory, which will begin production in April. According to Investment Minister Bahlil Lahadalia, the plans were hampered when the United States passed the Inflation Reduction Act, which disrupted the global supply chain for EV battery materials.