Sector Report

Economics – Nickel-odeon: Indonesia manufacturing revival

by Anthony Nafte / Mar 3, 2023


EV success will be a watershed for revival of Indonesian manufacturing
Indonesia has emerged as a serious competitor in the electric vehicle (EV) industry in South East Asia. This will provide a boost to manufacturing output and a spur to the investment cycle from rising FDI. This is potentially a watershed for structural revival of Indonesia’s manufacturing sector which could prove significant for reducing Indonesia’s dependence on the commodity cycle.

Thailand will be Indonesia’s biggest EV rival in South East Asia
There are alternatives to nickel based EV batteries, notably the lithium-iron phosphate (LFP) battery. However, higher battery density (vehicles can travel longer distances) underlines the projection for nickel based batteries to account for over 50% of projected demand in 2030, thereby maintaining Indonesia’s competitive edge. Thailand will be its biggest EV rival in South East Asia.

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