Indonesia’s investment minister stated Volkswagen would establish an electric vehicle (E.V.) battery ecosystem alongside Vale, Ford, and Zhejiang Huayou Cobalt.
Automakers want Indonesia’s raw materials for E.V. batteries, which make up 40% of a vehicle’s pricing, to lower costs and catch up to Tesla.
On Sunday, Minister Bahlil Lahadalia said that Volkswagen, Europe’s largest manufacturer, will collaborate with Vale, Ford, Huayou, French miner Eramet, and other Indonesian enterprises, including Merdeka Gold Copper, the parent company of Merdeka Battery, and Kalla Group.
In a video statement from Germany, where an Indonesian delegation led by President Joko Widodo was attending the industry fair Hannover Messe and meeting representatives of BASF, Eramet, and Volkswagen, he said the partnerships would involve joint ventures and raw materials.
Widodo’s office stated Volkswagen’s battery company, Powerco, would invest.
Bahlil also claimed BASF was interested in establishing a $2.6 billion battery materials plant with Eramet in Indonesia’s north Maluku area.
In January, BASF stated it would publish Eramet investment details after a review.
Bahlil said European funding would ease fears that Indonesia’s mining management “did not adhere to international standards.”
Last month, Jokowi, as Widodo is known, told Reuters that Indonesia would increase nickel mining environmental monitoring.
Volkswagen, Ford, Eramet, Kalla Group, Huayou, and Merdeka Gold Copper did not immediately respond to inquiries. Vale Indonesia declined to comment.
With the world’s largest nickel reserves, Indonesia is developing downstream businesses to make batteries and EVs.
Ford (F.N.) joined Vale Indonesia and Huayou in a $4.5 billion nickel processing complex in Southeast Sulawesi last month, its first investment in Indonesia.
Last month, Volkswagen announced 180 billion euros ($193 billion) in five-year investments in battery production and raw material sourcing.
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