Contemporary Amperex Technology Co. Ltd. (CATL), the world’s top battery maker, is reportedly seeking a loan of about US$1 billion to support its investment in Indonesia.

Sources familiar with the matter indicate that the loan may have a term of five to seven years.

The funds are expected to finance a joint venture between CATL and Indonesia Battery Corp., a government-owned company. This venture aims to establish a battery cell factory facility in Karawang, West Java.

Discussions with potential financiers are ongoing, and the terms of the loan may change. CATL has not publicly commented on this initiative.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Indonesia’s battery ambitions face persistent challenges despite rich nickel reserves

Indonesia’s EV battery sector has experienced significant setbacks despite possessing 22% of the world’s nickel reserves and implementing export bans to boost domestic processing 1.

Major investors have reevaluated their commitments, with LG Energy Solution withdrawing from an $8 billion battery project in April 2025 2, while CATL recently slashed funding for its Indonesian project by 65% due to weak global demand 3.

These decisions reflect broader challenges in Indonesia’s battery strategy, including low domestic EV adoption (under 5% of car sales in 2024), environmental concerns, and Chinese dominance of the nickel industry (controlling approximately 90% of mines and processing plants) 1.

CATL’s joint venture with Indonesia Battery Corporation represents an attempt to overcome these challenges, with plans to scale up battery production to 15 gigawatts annually 4.

The outcome of this investment will be crucial for Indonesia’s ambition to become one of the top three global producers of EV batteries by 2027, a goal that increasingly appears difficult to achieve despite its natural resource advantages.

2️⃣ CATL’s global expansion reflects strategic diversification amid geopolitical tensions

CATL’s $1 billion loan for Indonesian battery manufacturing follows a pattern of international expansion, including a €240 million ($270 million) investment in Germany announced in 2019 to build a factory with initial capacity of 14 GWh, expandable to 60 GWh 5.

The company has secured long-term contracts with major automakers including BMW (through a $897 million deal) and Honda, ensuring stable demand through 2027 6.

The Indonesian investment, coupled with CATL’s planned $5 billion Hong Kong listing, shows how the company is raising and deploying capital globally to maintain its position as the world’s leading battery manufacturer 7.