The start of the construction of material factories for electric vehicle batteries in various provinces is claimed to be the start of the development of an electric vehicle ecosystem in Indonesia. This was conveyed by President Joko Widodo when inaugurating the lithium battery anode factory owned by PT Indonesia BTR New Energi in Kendal, Central Java.
“So what we dream of is a large ecosystem of strong and integrated electric vehicles, one by one starting to appear,” said Jokowi.
The electric vehicle ecosystem, said Jokowi, is equipped with the construction of nickel smelters and its derivatives in several areas such as Morowali and Weda Bay. PT Freeport Indonesia's smelter will start production in September. Followed by a bauxite smelter in Mentawai, West Kalimantan.
“So if everything is done, once again the ecosystem will be built, we will be able to enter the global supply chain which will provide great added value, both in terms of workforce recruitment and our economic growth,” he said.
On this occasion, Jokowi admitted that it is not easy to build an ecosystem in the electric vehicle industry. The government's previous decision to stop exporting nickel raw materials, which are one of the main ingredients of electric batteries, is still reaping pros and cons to this day. However, he said, the consistency of government policies has begun to bear fruit with the soaring value of nickel exports and the development of an electric vehicle industry ecosystem in the country.
The lithium battery anode factory in Kendal will be able to produce 80,000 tons of anode material per year. With that production capacity, it will be able to produce at least 1.5 million electric cars.
“This battery anode factory, some of the goods we import, for natural graphite imported from Africa, for artificial graphite taken from the Pertamina refinery in Riau, then used as battery anode material. And also for the lithium battery industry, we don't have lithium, we have also taken lithium from Australia. But for cobalt, manganese, nickel are in Indonesia. If later all are integrated and become semi-finished goods or finished goods, we will become suppliers to global supply chain,” he said.
Luhut Explains Urgency of Nickel Downstreaming
On the same occasion, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said the anode is one of the important components in making lithium batteries that act as a negative axis. He explained that the current nickel downstreaming has formed a cathode component, which acts as a positive axis.
PT Indonesia BTR New Energy's investment in the country is considered to have a significant role in fulfilling Indonesia's ambition to become a major player in the global supply chain in the electric vehicle industry. Moreover, said Luhut, the company is currently building a second phase factory which will be completed on March 1, 2025, which is projected to produce 160,000 tons of anodes.
“With this capacity, Indonesia will become the world's second largest battery anode producer. As a comparison, Japan only has an anode production capacity of 10,000 tons, and South Korea only 40,000 tons, while the largest factory in China currently has a capacity of 100,000 tons. So we will be able to pass China in the near future,” said Luhut.
He added, “with the presence of this battery anode factory, the lithium battery industry ecosystem in Indonesia will be more complete.”
Observer: Residents Begin to Have Choice of Electric Vehicles
Energy observer Fabby Tumiwa agrees that Indonesia will eventually be able to become a major player in the electric vehicle industry at the global level. Moreover, in Southeast Asia, he said, only Indonesia and Thailand are developing an electric vehicle ecosystem.
“I think if it's battery production for electric vehicles, it's very possible that we (Indonesia) can become a player, because there is no other country besides Indonesia in Southeast Asia that produces batteries. We have an advantage, namely processed nickel, then now there are anodes and others. So, later if it runs, this supply chain can later support the manufacture of competitive batteries, so it's no wonder that Indonesia will be able to become a big player for that production,” said Fabby.
However, the government is asked to target domestic first, especially because the target population of electric vehicles set by the government until 2030 at the latest is 1-2 million electric vehicles.
“Of course, for battery manufacturers, the first target is the domestic market because it is the closest. If we want to have a domestic battery market, the electric vehicle industry must grow. Those who make electric cars and motorbikes must grow in Indonesia. so that they can absorb battery production,” he said.
He added, “If (the target) is 2 million in 2030, then after 2025 every year there must be at least 300-400 thousand electric cars produced. If we talk about today, the market has not arrived because it is only the last 2-3 years. This year we may be able to record higher growth, my estimate is 35-40 thousand electric vehicles that will be sold.”
Furthermore, Fabby assessed that the price of electric vehicles is competitive with the price of fuel-powered vehicles, making the trend of electric vehicles improve.
“What's interesting in Indonesia since the end of last year and the beginning of last year, electric cars that entered the market have entered the same price segment as commercial engines. So electric cars are on average lower end-there are already some that are Rp200 million, but the average is in the range of Rp300 million-Rp400 million. So between Rp370 million-Rp450 million there are quite a lot of models. In that price segment, most Indonesian consumers, people buy cars with prices in that segment between Rp300 million-Rp400 million. That's 70 percent of consumers who buy cars at that price level and now there are more. So actually if we say that the price of electric cars has started to be competitive with conventional cars, it's just a matter of consumer preference, what to choose?,” he concluded. (gi/ka-em)
