JakartaPost-Apr 28
Indonesian nickel is losing its relevance as Chinese carmakers flood the domestic market with electric vehicles that do not contain the commodity in their batteries. Such a development, experts said, has prompted LG, an early mover in Jakarta’s downstream dream, to reconsider its investment in the archipelago. Chinese EVs predominantly use Lithium Iron Phosphate (LFP) batteries, which does not contain nickel, the mineral which Indonesia has in abundance and planned to use as leverage to draw investment to local EV battery projects. In Indonesia, nearly 90 percent of the 43,000 EVs sold last year used LFP batteries, mostly from Chinese automakers. Topping the list is BYD, world’s largest EV maker, followed by Wuling, Chery and Neta, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo). “Downstream industrialization isn’t just about incentives or supply-side policy, it’s also about market demand. And Indonesia has failed to lock in EV battery demand for nickel,” said Andry Satrio Nugroho on Thursday. Andry, who heads the trade, industry and investment center at the Institute for Development of Economics and Finance (Indef), added that Indonesia EV policy “naturally gravitated” toward cheaper options, leaving demand for nickel-based batteries unprotected. He went on to say that foreign investors then saw the Indonesian market as already dominated by LFP, making it harder for early investors like South Korea’s LG Energy Solution (LGES), that expected a robust nickel-based market, to adjust to this new reality. LGES last week withdrew from a US$8.45 billion EV battery project dubbed Indonesia Grand Package it signed in 2020, citing shifting market conditions and a changing investment climate. The company pulled out of Project Titan, a proposed end-to-end production chain from nickel processing to battery cell manufacturing, which was meant to be the backbone of the country’s battery ecosystem. Read more at: https://www.thejakartapost.com/business/2025/04/28/lg-departure-marks-rude-awakening-for-indonesias-nickel-downstream-dream.html.
