Indonesia Can Lead the EV Global Market through Nickel Downstreaming

Sulawesi, VIVA – Over the past 10 years under leadership of President Joko Widodo (Jokowi), the government has worked to strengthen the nation's economic competitiveness through the downstreaming of critical minerals as one of its key policies.

Coordinating Minister for Economic Affairs, Airlangga Hartarto stated that it has been achieved using environmentally friendly technologies to improve public welfare.

Minister Hartarto added that the government's push for industrial downstreaming aims to create a multiplier effect, such as increasing the added value of domestic raw materials.

This effort aligns with the goal of attracting investments, generating export revenues, and creating more jobs.

"Nickel downstreaming has successfully increased the export value of nickel derivative products. This is evident from the export value rising eightfold from US$4.31 billion in 2017 to US$34.44 billion in 2023," the minister said at the Neo Energy Morowali Industrial Estate (NEMIE), Morowali Regency, Central Sulawesi.

Nickel downstreaming is key to Indonesia's potential in leading the development of the electric vehicle (EV) market in the country.

According to the Ministry of Investment/BKPM, as of June 2024, the total investment in nickel downstreaming, especially related to the construction of smelters and electric vehicle battery factories, has reached US$30 billion.

In the past five years, more than 2,000 GWh of lithium-ion battery capacity has been utilized globally, supporting 40 million electric vehicles and thousands of energy storage projects.

Therefore, Indonesia has a significant opportunity to become a key global player in electric vehicle battery production.

Indonesia is expected to supply 210 GWh of EV batteries annually, supported by its abundant mineral resources, especially nickel.

Minister Hartarto also acknowledged that this has drawn international attention to Indonesia's position as a crucial player in the supply of critical minerals.

Currently, Indonesia is in discussions with the United States, the European Union, Canada, and Australia regarding critical minerals agreements.

"If Indonesia joins forces with Canada and Australia, the EV ecosystem will become stronger, particularly with lithium and nickel, and now there is also development based on sodium or salt," he explained.

Although Indonesia has succeeded in raising awareness about its resource downstreaming strategy, this has not been welcomed by countries and entities that have long benefited from importing cheap raw materials from Indonesia.

Consequently, the downstreaming policy has led to a dispute with the European Union at the World Trade Organization (WTO), putting Indonesia in a challenging position.