Partnerships with countries experienced in EV development essential, says Indonesian business leader

JAKARTA, June 15 (Xinhua) -- Partnerships with countries experienced in electric vehicles (EV) development, particularly China, will be essential for the Indonesian EV industry, an Indonesian business leader told Xinhua.

Indonesia's automotive industry has developed rapidly over the past 50 years and has been undergoing a shift toward cleaner energy vehicles. With the swift adoption of EVs, the country has emerged as a promising destination for nickel investment.

Kukuh Kumara, secretary general of the Association of Indonesia Automotive Industries (GAIKINDO), told Xinhua in an interview that the transition toward EVs has drawn significant attention from the Indonesian public, supported by the government's strong push for the nickel downstream industry. However, building a complete downstream ecosystem requires many more components.

"From the mining process to ready-to-use batteries, there is a huge process involved. There are three main components in EVs: batteries, electromotors, and semiconductor chips for battery management. Moreover, EV batteries are very specific. Even EVs from the same brand can use different types of batteries, each containing numerous components," Kumara said.

As Southeast Asia's largest economy, Indonesia is currently attracting numerous international EV automakers and nickel miners.

From 2024 to March 2025, seven EV manufacturers, including BYD, Citroën, Geely, and VinFast, have invested in the country, with a total investment value of 15 trillion rupiahs (921.9 million U.S. dollars), according to the Ministry of Investment and Downstream Industry. Together, these companies have brought a combined production capacity of up to 280,000 units per year.

Currently, Indonesia is home to nine electric car manufacturers, seven electric bus production facilities, and 63 two- and three-wheeled electric vehicle factories. According to data from the Ministry of Industry, the annual production capacities are 70,600 units for electric cars, 3,100 units for electric buses, and 2.28 million units for two- and three-wheeled electric motorcycles.

In terms of raw materials, Indonesia remains the world's largest holder of nickel reserves, accounting for 40 percent to 45 percent of global supply.

As of 2023, Indonesia had nickel resources in the form of ore amounting to 18.5 billion tons, with total reserves reaching 5.3 billion tons, according to the Ministry of Energy and Mineral Resources. By January 2024, 54 nickel smelters were in active operation across the country.

While many companies have already invested in mining and EV manufacturing, Kumara emphasized the need to focus more on battery component industries.

"We need to expand the industry, especially in the three main components, including the electromotor, which we are still importing. Also, semiconductors for battery management systems are not yet produced locally," he said.

"We want to encourage the supporting industries to grow alongside the EV industry. That's why we should begin identifying which components can be manufactured locally," Kumara added.

He noted that by building more industries related to the EV supply chain, Indonesia could strengthen its downstream capabilities, create job opportunities, and facilitate knowledge transfer. For this reason, "It's interesting because China is known for its strong EV component industry. We encourage our local companies to learn from Chinese firms." Kumara said.■