Race of the EVs: Nickel-rich Indonesia plans to become major battery maker, woos Tesla investment

With the largest reserves of nickel among, Indonesia is planning to become a major player in the EV industry, and set up its own battery-production facilities that would boost the local EV-market, as well as set up supply chain channels that would allow them to export batteries to other car manufacturers, in other countries. Despite its sizeable nickel ore reserve, Indonesia has banned the export of nickel ore and is cajoling global EV makers like Tesla, to set up their factories and shops up in the country. EVs use more metal than regular cars - EV batteries, in particular, are largely dependent on nickel mostly in the form of a foam.   In only three years, Indonesia has inked more than a dozen contracts worth more than $15 billion for battery and electric car production with companies such as Hyundai Motor, LG Group, and Foxconn. Moreover, President Joko Widodo has pulled out all the stops to convince CEO Elon Musk to manufacture electric vehicles or batteries in Indonesia. “I’m very confident this industry will grow quickly, will grow very fast,” the president, popularly known as Jokowi, said in an interview last week. Indonesia nearly has a quarter of the world’s nickel reserves, or about 21 million tonnes in proven reserves, according to the U.S. Geological Survey.   Jokowi said he has even offered Tesla a nickel mining concession and tax breaks to invest in the country, and that he was confident a deal would be finalised. While Tesla is looking for additional manufacturing hubs, it has not commented on any firm plans in Indonesia. South Korea, Canada and Mexico have also been trying to entice the carmaker. The company has signed nickel-sourcing contracts worth about $5 billion from companies in Indonesia, Indonesia mined about 1.4 million tonnes of nickel in January-November last year, according to the International Nickel Study Group. In comparison, the second-largest nickel producer, the Philippines, mined just 290,000 tonnes. Jokowi banned exports of nickel ore in 2020 but allowed the export of higher-value nickel products - forcing companies to process and manufacture onshore. “The Indonesian government is building a whole value chain for servicing electric vehicle factories,” said Victor Chin, principal consultant at metal consultancy firm CRU. “So it only makes sense for Tesla to consider Indonesia, both for a gigafactory and also for car manufacturing,” he said. Musk’s target is to sell 20 million electric vehicles by 2030, a 15-fold increase from the 1.3 million vehicles Tesla sold in 2022. It would need to create seven or eight additional “gigafactories” - large-scale production facilities for electric car batteries - at a rate of one every 12 months or so. In the interview, Jokowi stated that if the government successfully builds the electric car ecosystem, nickel exports might increase by 200 times from pre-ban levels of roughly $1 billion. Jokowi did not provide a timetable for increased exports, but stated that Indonesia aims to build an integrated supply chain for electric car batteries by 2027. Indonesia also plans on banning exports of copper ore and bauxite in June, both of which are used in electric vehicle production. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.