# Volkswagen to partner on Indonesia EV battery ecosystem -minister
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-04-17
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Volkswagen to Partner in Indonesia EV Battery Ecosystem -
Meta Description: Volkswagen to collaborate with Vale, Ford, and Huayou to build EV battery ecosystem in Indonesia, aiming to boost battery production and cut costs.
URL: https://financedigest.com/volkswagen-to-partner-on-indonesia-ev-battery-ecosystem-ministerhtml

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JAKARTA (Reuters) – Volkswagen will build an electric vehicle (EV) battery ecosystem in Indonesia and will partner with miner Vale, Ford and China’s battery minerals producer Zhejiang Huayou Cobalt, the Southeast Asian country’s investment minister said.

Automakers are courting Indonesia for its raw materials used in producing EV batteries, which account for about 40% of a vehicle’s sticker price, aiming to cut costs and close the gap on EV market leader Tesla.

Minister Bahlil Lahadalia said on Sunday that Volkswagen, Europe’s biggest automaker, will work with Vale, Ford, Huayou, French miner Eramet and several Indonesian firms such as Merdeka Gold Copper, the parent company of Merdeka Battery, and energy firm Kalla Group.

The partnerships would consist of joint ventures and supply raw materials, he said in a video statement from Germany, where an Indonesian delegate led by President Joko Widodo was attending industry fair Hannover Messe and meeting representatives of [companies including German](https://www.financedigest.com/around-40-of-german-companies-expect-output-decline-in-2023-iw-institute.html "Around 40% of German companies expect output decline in 2023 – IW institute") chemical giant BASF, Eramet and Volkswagen.

Separately, a statement issued by Widodo’s office said [Volkswagen’s investment will be carried out by its battery](https://www.financedigest.com/volkswagen-to-invest-in-mines-in-bid-to-become-global-battery-supplier.html "Volkswagen to invest in mines in bid to become global battery supplier") unit PowerCo.

Meanwhile, Bahlil said BASF had also expressed an interest in [building a plant to produce battery](https://www.financedigest.com/li-cycle-to-build-french-battery-processing-facility.html "Li-Cycle to build French battery processing facility") materials, partnering with Eramet, in Indonesia’s north Maluku province, for a total investment of about $2.6 billion.

BASF did not immediately respond to a request for comment, but the company in January said details of its investment [plan with Eramet would be announced](https://www.financedigest.com/eu-announces-plans-to-lead-green-industrial-revolution.html "EU announces plans to lead green industrial revolution") once an assessment was concluded.

Bahlil said [investment interest by European companies would allay concerns that Indonesia’s management](https://www.financedigest.com/french-watchdog-fines-h2o-asset-management-executives-over-tennor-investments.html "French watchdog fines H2O Asset Management, executives over Tennor investments") of its mines “did not adhere to international standards.

Widodo, who is widely known as Jokowi, told [Reuters last month that Indonesia](https://www.financedigest.com/indonesia-to-tighten-used-shoe-import-controls-after-reuters-report.html "Indonesia to tighten used shoe import controls after Reuters report") will improve monitoring of environmental standards for nickel mining, amid concerns over the impact of production of the metal.

Volkswagen, Ford, Eramet, Kalla Group, Huayou, and Merdeka Gold Copper did not immediately respond to requests for comment. PT Vale Indonesia declined to comment.

Indonesia, which has the [world’s biggest](https://www.financedigest.com/biggest-economy-in-the-world.html "Biggest Economy in the World") nickel reserves, has been trying to develop downstream industries for the metal, ultimately aiming to produce batteries and EVs.

Last month, Ford inked its first investment in Indonesia by joining Vale Indonesia and Huayou in a $4.5 [billion nickel processing plant](https://www.financedigest.com/intel-wants-5-billion-more-in-german-subsidies-for-chip-plant-bloomberg-news.html "Intel wants billion more in German subsidies for chip plant – Bloomberg News") in Southeast Sulawesi.

Volkswagen last month said it plans to [invest 180 billion euros](https://www.financedigest.com/germanys-merck-to-invest-300-million-euros-in-us-gas-plant.html "Germany’s Merck to invest 300 million euros in US gas plant") ($193 billion) over five years in areas including battery production and raw material sourcing.

(Reporting by Stanley Widianto; Additional reporting by Bernadette Christina and Siyi Liu in Beijing; Editing by Ed Davies)


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