Volkswagen will build an electric vehicle (EV) battery ecosystem in Indonesia and partner with miner Vale, Ford and China’s battery minerals producer Zhejiang Huayou Cobalt, Indonesian investment minister Bahlil Lahadalia has 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 Lahadalia said on April 16 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, adding that the partnerships will consist of joint ventures and supply raw materials.

Separately, a statement issued by President Joko Widodo’s office said Volkswagen’s investment will be carried out by its battery unit PowerCo.

Meanwhile, Bahlil said Germany’s chemicals group BASF had also expressed an interest in building a plant to produce battery materials, partnering with Eramet, in Indonesia’s north Maluku province, for a total investment of about 2.6 billion USD.

Last month, Ford inked its first investment in Indonesia by joining Vale Indonesia and Huayou in a 4.5 billion USD nickel processing plant in Southeast Sulawesi.

Volkswagen last month said it plans to invest 180 billion EUR (193 billion USD) over five years in areas including battery production and raw material sourcing./.

Source: Vietnam News Agency