CATL and Indonesian Government to invest US$6b into local battery and EV industry

CATL Indonesian Government invest battery EV industry
CATL’s collaboration with Indonesian Government entities follows Tesla’s failed attempts to negotiate construction of a battery factory in the country.

Following Tesla’s failed negotiation attempts, Chinese battery manufacturer Contemporary Amperex Technology Co., Limited (CATL) has announced a US$6 billion collaboration with two Indonesian Government-owned entities to develop the country’s battery mineral mining, processing, refining, manufacturing and downstream electric vehicle (EV) industry.

CATL’s subsidiary Ningbo Contemporary Brunp Lygend has signed a three-way agreement with Indonesian Government-owned PT Aneka Tambang (ANTAM) and PT Industri Baterai Indonesia to work together on developing the region’s battery and EV supply chain via the Indonesia EV Battery Integration project.

As part of the collaboration, the project will be based at the FHT Industrial Park in Indonesia’s North Maluku Province, with other locations for operations to be set up as well.

Via this investment, CATL aims to strengthen its foothold in the global battery industry – and ensure supply of upstream raw materials and resources, lower manufacturing costs and promote the development of battery recycling business.

CATL founder and chairman Robin Zeng says the Indonesian investment is “an important milestone” as the company looks to expand its global footprint, while building relations between Indonesia and China.

“We are fully confident in the development of the project in the future,” he said.

Indonesia’s Coordinating Minister for Maritime Affairs and Investments Luhut Binsar Pandjaitan says the agreement with CATL is of “significant importance” to Indonesia as it develops its EV sector.

“I believe with the concerted efforts from all parties, the project will be successfully implemented,” he said.

Strengthening China-Indonesia relations

The three parties have contributed funds amounting to almost US$6 billion, with the goal of beginning operations in the FHT Industrial Park and other industrial parks in Indonesia as soon as 2026, with construction beginning this year.

Mr Zeng says the collaboration will strengthen China and Indonesia’s existing bond.

“[The Indonesian project] will become an emblem of the everlasting friendship between China and Indonesia,” he said. 

CATL moves on Indonesia after Tesla’s withdrawal 

CATL’s Indonesian focus follows an announcement earlier this month that its German battery factory is in its final construction stages with first batteries to roll-off assembly lines before the end of the year.

Indonesia is home to the world’s largest nickel reserves and its government is keen to utilise them to develop the region’s battery and EV industries.

In mid-March, Indonesian President Joko Widodo reiterated to the public vast amounts of natural resources available within the country.

“We have nickel, cobalt, the key materials to make lithium batteries, and bauxite that could be processed into aluminium and, in turn, be used to make electric vehicle frames, as well as copper that is also needed by batteries and wiring systems in electric vehicles,” he said.

There has previously been plenty of interest into making use of the country’s resources, with electric vehicle making giant Tesla coming up with grand plans to build a factory in Indonesia.

However, after 12 months of negotiations between Tesla and the Indonesian Government, Tesla walked away.

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