Published on April 12th, 2020 | by Daniel Sherman Fernandez0
Indonesia, The New ASEAN Electric Vehicle Hub
Indonesia boasts a rich supply of the mineral resources that the Electric Vehicle (EV) industry needs. The country provides 25% of the world’s nickel reserves as well as other metals such as cobalt. These are crucial metals in the production of EV batteries and, therefore, in the entire supply chain for these vehicles. This is the reason why car manufacturers with huge EV plans are investing heavily in Indonesia and at the same time taking advantage of the huge Indonesian middle class which has been rising year on year since Indonesian president Joko Widodo came into power with his clean up and straight forward government. Setting aside red tape and reducing corruption and giving investors a clear indication of incentives, Indonesia will be far ahead of Malaysia in just a short few years. This will happen, despite the COVID-19 global issue and the rising economic issues as the need for clean fair priced mobility will continue.
Changing Automotive Trends
The last decade saw significant trends in technology; some of the most significant interest and growth was focused on the EV industry. Once a pipe dream of green technologists, electric vehicles enjoyed tremendous growth in the past decade. By 2018, global EV sales had reached 2 million units, and that number is expected to double to 4 million in 2020. In addition, the once-lofty price of these vehicles is falling, and their battery packs could be cheaper than equivalent combustion-engine models as early as 2022.
This momentum is causing huge growth in the market for the metals used in EV batteries. Industry experts predict that the EV market will need around 1.3 million tons of nickel each year by 2030, compared with 600,000 tons in 2018. Cobalt is facing a similar rise in demand, with experts predicting a 332% increase in global supply from its 2017 levels, to 314,000 tons per annum.
The richness of Indonesia’s mineral deposits isn’t the only reason for the country’s growing prominence in the EV supply chain. Indonesia’s location on the rim of the Pacific gives the country a straight nautical transport route to Japan, a major player in developing new technology, and China. China is developing its own battery industry, focused on becoming a leader in the production of power cells to be used in all sorts of products. Both countries represent significant markets for EV minerals, markets to which Indonesia can easily cater because of its favorable geographic location.
The Indonesian government is leveraging its advantages as it actively works to strengthen its EV industry. Last year, Indonesian president Joko Widodo signed a decree outlining the government’s support for Indonesian EV production. The plan includes reduced tariffs for companies importing equipment for EV production, thereby making it easier for the industry to grow. New regulations are creating a profitable space for companies such as Bolt Metals.
For the third year in a row, Honda Motor Company Ltd has earned the Kelley Blue Book Plug-In Hybrid Car Best Buy with its Honda Clarity model. Tesla Inc. has seen impressive success with its Tesla Model 3, which is one of the best-selling cars in Europe. Toyota Motor Corporation just announced plans to build a new electric vehicle plant in China. And Toyota is partnering with Panasonic Corp ADR to establish Prime Planet Energy & Solutions, Inc., a joint venture specializing in automotive prismatic batteries.