Xinhua Headlines: Chinese investment empowers Indonesia's EV supply chain

* Indonesia is currently the world's largest producer of nickel and holds the biggest-known reserves of the metal, an essential component in EV batteries.

* A new electric vehicle (EV) battery megaproject, whose groundbreaking took place on Sunday, is a nearly 6-billion-U.S.-dollar joint venture with China.

* Chinese firms have played a pivotal role in bringing technology, capital and global market access to Indonesia, particularly in EV batteries and supply chain integration, said Kukuh Kumara, secretary general of the Association of Indonesia Automotive Industries.

JAKARTA, July 2 (Xinhua) -- The groundbreaking of a new electric vehicle (EV) battery megaproject in Indonesia set another milestone in the country's rapidly growing EV supply chain, driven by Chinese investment.

JOINT VENTURE

The project, whose groundbreaking on Sunday was witnessed by Indonesian President Prabowo Subianto in Karawang, West Java, is a joint venture with China, worth nearly 6 billion U.S. dollars, and covers the full supply chain, from nickel mining and processing to battery materials production, manufacturing and recycling.

Indonesia is currently the world's largest producer of nickel and holds the biggest-known reserves of the metal, an essential component in EV batteries.

The project is jointly conducted by Indonesia's state-owned miner PT Aneka Tambang Tbk, state-owned investment holding company PT Indonesia Battery Corporation and China's Ningbo Contemporary Brunp Lygend Co., Ltd.

"This groundbreaking is proof of our leaders' seriousness in collaborating with our partners and our friends in China. We can work together on a program that I think can be called colossal, an extraordinary breakthrough," Prabowo said at the groundbreaking ceremony.

According to Indonesian Minister of Energy and Mineral Resources Bahlil Lahadalia, the project is expected to create 35,000 jobs and contribute up to 42 billion dollars annually to the national GDP. He also highlighted that the plant's capacity would support the production of batteries for 300,000 vehicles, potentially reducing Indonesia's fuel imports by approximately 300,000 kiloliters per year.

GREEN TRANSITION

The Indonesian government has been actively promoting the nickel industry to increase national competitiveness and build an ecosystem for the EV battery industry. The ambition is also aligned with Indonesia's long-term commitment to achieving net-zero emissions by 2060.

Fahmy Radhi, an energy economics expert from Gadjah Mada University, said, "This transformation is more than an energy transition. It opens the door to clean technology, encourages green infrastructure development, and provides a strategic path for Indonesia to become a clean-energy industrial nation."

He also highlighted the importance of ensuring that investment does not stop at the smelter level. "The process must extend to the production of final goods, such as EV batteries or even electric vehicles themselves."

Currently, Indonesia is home to nine electric car manufacturers, seven electric bus production facilities, and 63 two- and three-wheeled electric vehicle factories.

CRUCIAL PARTNER

Kukuh Kumara, secretary general of the Association of Indonesia Automotive Industries, emphasized the critical role of partnerships with countries experienced in EV development, particularly China. "From the mining process to ready-to-use batteries, there is a huge process involved," he said.

Kumara said that expanding industries related to the EV supply chain will not only strengthen Indonesia's downstream capabilities but also create jobs and promote know-how transfer. "China is known for its strong EV component industry. We encourage our local companies to learn from Chinese partners," he said.

"Our ultimate goal is to develop Indonesia's own auto brands, local factories and indigenous technical capabilities," Kumara said. "But at this stage, international partners are still crucial."

Chinese firms have played a pivotal role in bringing technology, capital and global market access to Indonesia, particularly in EV batteries and supply chain integration, said the business leader.

As the first Chinese automaker to invest and establish a factory in Indonesia, SAIC-GM-Wuling (SGMW) has helped 17 Chinese enterprises in the auto supply chain to venture into ASEAN's biggest economy, developing over 100 local suppliers over the past seven years.

The Chinese automaker has also contributed to fostering Indonesia's own EV sector. Last November, the China-Indonesia Institute of Modern Craftsmanship of New Energy Vehicle, a training base established by China's Liuzhou City Vocational College, Indonesia's Anand Industrial Training Institute and the SGMW's Indonesian subsidiary, was officially inaugurated in Indonesia.

"What is prominent in Chinese investment is the genuine willingness to implement technological transfer and human development programs through joint research, expert and trainee exchanges, vocational training, etc," said Christine Susanna Tjhin, co-founder and director of strategic communication and research at the Gentala Institute, an independent consulting firm. (Video reporters: Sun Lei, Gu Lu, Wa Yang, Cen Yunpeng; video editors: Hong Yan, Zhao Xiaoqing)■