#Indonesia’s #Nickel sector can rebound from #Tesla EV setback, but #Chinese market dominance a concern
Tesla’s decision to set up its electric-vehicle facilities in neighbouring Malaysia was a blow to Indonesia’s efforts to lure investments for building an end-to-end EV supply chain ecosystem.
Indonesia’s nickel “downstreaming” policies aim to use the country’s vast nickel reserves and ore production to add value to the EV industry by processing raw ore into higher-grade nickel intermediates. These higher-grade nickel intermediates are essential components used in the production of stainless steel and nickel cobalt manganese-based (NCM) EV batteries.
In terms of attracting investment, Indonesia’s nickel downstreaming policies have produced results. In 2020, the Indonesian government banned the export of raw nickel ore to attract investment, largely in nickel smelters. A year later, the country received downstream investments and commitments from Chinese companies totalling some US$30 billion. As of July 2023, there were already 43 nickel smelters operating, 28 under construction and 24 in the planning stage.
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