- Indonesia’s nickel deposits fuel a surge in EV battery investments.
- The country aims to produce 600,000 EVs by 2030.
- Improvements in infrastructure and productivity are crucial for competitiveness.
Nickel-ing and dime-ing its way to the top
Indonesia’s vast nickel deposits, a crucial component in EV batteries, have fueled an explosion in foreign direct investments (FDI) in the manufacturing sector.
JLL reports that FDI has soared from under $2 billion in 2011 to over $20 billion in 2023, thanks to government incentives and tax breaks for battery-based EVs.
The global manufacturing landscape is rebalancing, shifting supply chains from China to Southeast Asia.
Indonesia, along with its neighbors, stands to benefit from this trend, driven by the need for diversification and the region’s strong fundamentals, including a large population, labor pool, and favorable costs.
Indonesia’s EV dreams
Indonesia aims to produce 600,000 EVs by 2030, attracting investments from Chinese manufacturers like Neta Auto. The country recorded 204.4 trillion rupiah ($16.9 billion) in FDI in Q1 2024, with 55% going to the manufacturing sector.
FDI is crucial to Indonesia’s efforts to boost GDP above 5% and create more jobs, but improvements in infrastructure and labor productivity are needed to enhance competitiveness.
To read the original article: https://www.techinasia.com/indonesias-ev-battery-bet-benefiting-regional-supply-chain-shift-report
