Reuters are reporting that Indonesia’s investment minister, Bahlil Lahadalia, has announced that Volkswagen (VW) will build an electric vehicle (EV) battery ecosystem in Indonesia and will partner with miner Vale, Ford and China’s battery minerals producer Zhejiang Huayou Cobalt.
Automakers are courting Indonesia for its raw materials used in producing EV batteries, which account for about 40-percent of a vehicle’s sticker price, aiming to cut costs and close the gap on EV market leader Tesla.
Minister Bahlil said on Sunday that Volkswagen, Europe’s biggest automaker, will work with Vale, Ford, Huayou, French miner Eramet and several Indonesian firms such as Merdeka Gold Copper, the parent company of Merdeka Battery, and energy firm Kalla Group, say Reuters.
The partnerships would consist of joint ventures and supply raw materials, he said in a video statement from Germany, where an Indonesian delegation led by President Joko Widodo was attending industry fair Hannover Messe and meeting representatives of companies including German chemical giant BASF, Eramet and Volkswagen.
Separately, a statement issued by Widodo’s office said Volkswagen’s investment will b
Meanwhile, Bahlil said BASF had also expressed an interest in building a plant to produce battery materials, partnering with Eramet, in Indonesia’s north Maluku province, for a total investment of about USD 2.6-billion.
BASF did not immediately respond to a request for comment, but the company in January said details of its investment plan with Eramet would be announced once an assessment was concluded, report Reuters.
Bahlil said investment interest by European companies would allay concerns that Indonesia’s management of its mines “did not adhere to international standards.”
Widodo, who is widely known as Jokowi, told Reuters last month that Indonesia will improve monitoring of environmental standards for nickel mining, amid concerns over the impact of production of the metal.
Volkswagen, Ford, Eramet, Kalla Group, Huayou, and Merdeka Gold Copper did not immediately respond to requests for comment. PT Vale Indonesia declined to comment.
Reuters say that Indonesia, which has the world’s biggest nickel reserves, has been trying to develop downstream industries for the metal, ultimately aiming to produce batteries and EVs.
Volkswagen last month said it plans to invest 180-billion Euros (USD 193-billion) over five years in areas including battery production and raw material sourcing.