Four Chinese companies plan to invest in Indonesia’s electric vehicle (EV) industry, according to chief investment officer of Danantara Pandu Sjahrir.

Speaking at the Global Business Summit on Belt and Road Infrastructure Investment in Jakarta on May 25, Sjahrir noted that these firms are interested in EV battery development, data centers, and consumer services, though he did not disclose their names.

Sjahrir added that these investments are expected to enhance local economic growth. They will also improve human resource capacity and technological knowledge.

Director of maritime, transportation equipment, and defense industries ministry of industry Mahardi Tunggul Wicaksono confirmed that both Chinese and European automotive companies are looking to collaborate on EV and EV battery projects in Indonesia.

He noted that discussions with several Chinese firms have already begun, with European companies also expressing interest.

🔗 Source: Katadata

🧠 Food for thought

1️⃣ Indonesia’s mineral wealth creates a strategic advantage in the global EV race

Indonesia’s push to attract Chinese EV manufacturers builds on its position as the world’s largest producer of refined nickel, a critical battery component.

The country holds approximately 30% of global nickel reserves, making it an essential player in the EV supply chain at a time when battery material sourcing has become a geopolitical priority 1.

This natural resource advantage has already attracted major investments, with Indonesia recording $53 billion in investment inflows during the first half of 2024 alone, with significant portions directed toward transportation and basic metals 2.

Indonesia’s strategy focuses on resource-leveraging. Rather than exporting raw materials, the government is requiring domestic processing and manufacturing, effectively trading access to nickel for a complete EV industry ecosystem.

The government has set ambitious targets to capitalize on this advantage, aiming for 20% of vehicle production to be electric by 2025 and producing 2 million electric cars and 13 million electric motorcycles by 2030 3.

2️⃣ Global trade tensions are reshaping the EV manufacturing landscape

The Indonesian government’s report of increased Chinese investment interest corresponds with escalating US-China trade tensions and tariff policies.

These new investments reflect Chinese manufacturers seeking alternative production bases as the US has imposed 100% tariffs on Chinese EVs, effectively blocking direct exports to that market 4.