Volkswagen To Build EV Battery Plant In Indonesia

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, Stanley Widianto reported for Reuters.

Photo Insert: A Volkswagen EV battery plant

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 like 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, Bahlil said in a video statement from Germany, where an Indonesian delegation led by President Joko Widodo is attending the industry fair Hannover Messe and meeting representatives of companies including German chemical giant BASF, Eramet, and Volkswagen.

"Indonesia is an important and interesting country in terms of raw materials and we are in a positive exchange with the government and suppliers," Volkswagen said in a statement.

Bahlil said 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.

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