Autos

CATL, LG Chem and Tesla take an interest in Indonesia

On the island of Java, the battery giants for electric vehicles have signed two factory projects for 12 billion euros, where Tesla has also expressed interest in a local site.

While Asian battery production is overwhelmingly located in China, South Korea and Japan, the sector could soon diversify thanks to Indonesia.

This Southeast Asian country is one of the most populous in the world, with a population of 267 million. Despite this, the automotive market barely exceeds one million units and no national player exists there. On the other hand, the electric car could become a specialty there. The island of Java contains significant nickel resources, a key element for batteries. It would also offer better competitiveness than China according to local authorities.


Two big heavyweights invested heavily in Indonesia in December. South Korean LG Chem, through its new battery subsidiary LG Energy Solutions, signed a 10 trillion won (7.5 billion euro) deal on December 18. The second is the Chinese CATL with a capital of 71.9 billion rupees (4.6 billion euros). The two Asian players will establish themselves in the new industrial zone of Batang, which would be effective by 2024.

Soon an Indonesian Tesla Gigafactory?

“I got a call from Tesla in the US […] they are also interested in building a lithium battery factory in Indonesia “, said Luhut Binsar Pandjaitan, Minister of Investment.

Nothing has been signed yet, but Elon Musk’s firm is closely watching Asia for its next plant. Besides Indonesia, India is also on the list.

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