CATL to set up an EV battery manufacturing facility in Indonesia, to invest US$5.1 billion into the project –

Chinese battery manufacturer Contemporary Amperex Technology Limited (CATL) is setting up a manufacturing plant for electric vehicle batteries in the country and will be investing US$5.1 billion (RM20.88 billion) into the project, the Jakarta Globe reports.

According to Bahlil Lahadahlia, the head of the country’s Investment Coordinating Board (BKPM), CATL recently inked a deal with the government, and construction of the plant will commence sometime next year. “We signed the agreement when we were in China recently. The groundbreaking will commence in 2021,” he said.

The Shenzen-listed company is one of the world’s largest EV battery makers, and is a mahor supplier to a host of automakers, including Hyundai, Honda, Mercedes-Benz, Tesla, Toyota, Volkswagen and Volvo. Its move to set up a manufacturing facility in the republic follows on an earlier joint-venture to develop key components needed for battery manufacturing that are extracted from nickel ore.

Two years ago, plans were announced for a US$700 million (RM2.86 billion) project to make battery-grade nickel chemicals in Morowali, Central Sulawesi. Besides CATL, partners in the project are Chinese battery firm GEM, stainless-steel maker Tsingshan, Japanese trading firm Henwa and local industrial complex company Indonesia Morowali Industrial Park.

The latest investment announcement further outlines the country’s ambition to become a major player in lithium battery manufacturing. It has been reported that Indonesia, which has now banned the export of nickel ore, is looking to develop a full supply chain for nickel locally, not just in extracting battery chemicals but making batteries and eventually building EVs.

In October, it was reported that a group of Indonesian state-owned companies were forming a JV for EV battery production, and earlier this week, Indonesia restated it would meet Tesla to further discuss plans for the US automaker to set up a battery plant in the country.

The country is hedging on its nickel reserve, which accounts for 25% of the world’s proven reserve of the chemical element, to support that ambition. “It all comes down to our nickel. 85% of the raw material for the battery comes from Indonesia, so Indonesia must be a key player in renewable energy, especially in EV batteries,” Bahlil said.

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