CATL plans to build battery plant in Indonesia

Chinese battery cell manufacturer CATL plans to invest five billion US dollars in a battery factory in Indonesia. According to the Indonesian government, Tesla will also send a delegation next month to discuss possible investments in a supply chain for its electric cars.

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CATL’s planned production facility is apparently scheduled to go into operation in 2024, Reuters reported, citing government sources. So far, no information has been released on the plant’s planned production capacities. Reuters also reports that Tesla is apparently also interested in investing in the Southeast Asian country with significant Nickel resources. The Tesla information was given by the Indonesian government itself.

As was revealed in October, a number of state-owned Indonesian companies are planning a joint venture centred around batteries for electric vehicles. The joint venture, called Indonesia Battery Holding, is supposed to help build an industry that will cover everything from the production of chemicals and minerals to the production of battery cells and the recycling of old batteries. The name CATL, among others, has already come up in this context.

Indonesia is interesting for battery production or its precursors because, according to data from BloombergNEF, 24 per cent of global nickel deposits are located in the country. There were already rumours last summer that a consortium of Tesla, CATL, LG Chem, Daimler and Volkswagen was planning a raw materials factory in the country. The two German automakers immediately denied their alleged involvement to electrive.net – and nothing seems to have come of this project in the past year and a half.

Indonesia has made a public policy of building Indonesia into an electric vehicle manufacturing nation built on the Southeast Asian country’s significant nickel and cobalt resources.

For capitalisation of these resources and their related industries, primarily regarding electric vehicles – the Indonesian government has supported the uptake of electric vehicle use with a number of measures.  Meanwhile, the government is also striving to make attractive conditions who want to assemble and produce electric vehicles in Indonesia. Hyundai is inching in to make the most of South East Asia’s largest vehicle market, in direct competition with Japanese automakers, who dominate the region.

This time last year, Hyundai Motors signed a memorandum of understanding with the Indonesian government to build a vehicle manufacturing plant in Kota Deltamas, east of Jakarta, where an “electric production line is also being explored.” The South Korean carmaking giant will invest 1.55 billion USD in the plant until 2030. In June 2019 Toyota announced that it plans to invest 2 billion USD in the development of electric vehicles in Indonesia over the next four years.

Now that CATL is investing in Indonesia, the groundwork is laid for the Indonesian government’s goals of becoming an electric vehicle production hub.

Update 02 January 2021: The value chain for the planned production of electric vehicle batteries in Indonesia is becoming more concrete. After it was announced in December that the Chinese battery cell manufacturer CATL intends to invest five billion US dollars in a battery factory in Indonesia, a memorandum of understanding on an investment agreement has now also been reached with the South Korean cell producer LG Energy Solution. This is worth the equivalent of around eight billion euros and also includes the construction of a battery factory.

reuters.com, reuters.com (update)