Indonesia: Volkswagen to partner on Indonesia EV battery ecosystem

Indonesian investment minister, Bahlil Lahadalia has stated Volkswagen will build an electric vehicle (EV) battery ecosystem in Indonesia and will partner with miner Vale, Ford and China’s battery minerals producer Zhejiang Huayou Cobalt.

Automakers are courting Indonesia for its raw materials used in producing EV batteries, which account for about 40% of a vehicle’s sticker price, aiming to cut costs and close the gap on EV market leader Tesla.

The Minister said on Sunday that Volkswagen, Europe’s biggest automaker, will work with Vale, Ford, Huayou, French miner Eramet and several Indonesian firms like Merdeka Gold Copper, the parent company of Merdeka Battery, and energy firm Kalla Group.

The partnerships would consist of joint ventures and supply raw materials, Bahlil said in a video statement from Germany, where an Indonesian delegation led by President Joko Widodo is attending industry fair Hannover Messe and meeting representatives of companies including German chemical giant BASF, Eramet and Volkswagen.

“Indonesia is an important and interesting country in terms of raw materials and we are in a positive exchange with the government and suppliers,” Volkswagen said in a statement.

Indonesia, which has the world’s biggest nickel reserves, has been trying to develop downstream industries for the metal, ultimately aiming to produce batteries and EVs.

Last month, Ford inked its first investment in Indonesia by joining Vale Indonesia and Huayou in a $4.5 billion nickel processing plant in Southeast Sulawesi.

Volkswagen last month said it plans to invest 180 billion euros ($193 billion) over five years in areas including battery production and raw material sourcing.