Asia to reinforce its EV market position
Electric is the way forward. Many corporate Fleet Managers would agree, but probably not as much as the IBC. Unfamiliar with the acronym? That’s normal. IBC or “Indonesia Battery Corp.” is a 2-month-old group of 4 Indonesian state-owned companies: a mining company, a nickel producer and oil & gas company as well as an utility company. The objective of the group? Sell nickel!
Indeed, Indonesia is the largest global nickel producer. An important industrial advantage, but even more so as the consumer has been developing a taste for electric vehicles, incentivized by governmental and tax measures to “do the right thing.”
It’s a rare opportunity for a country that has been so far mainly a producer and exporter of raw commodity: that of becoming a player in the global EV supply chain.
This transition is however a challenge. Lessons learned from the Chinese: if you want to become smarter, you need to import knowledge through partnerships. And this is where LG comes in.
LG Group, and some others
LG has joined some of its companies (Energy Solution, Chem, International) in a group together with a Korean steelmaker and a Chinese cobalt producer. Both China and South-Korea are heavily invested in the EV battery industry and see potential in building out part of their supply chain close to the source.
The LG consortium has joined forces with the IBC to build an EV battery plant a few hours away from Jakarta, in West Java. Coincidentally, Hyundai is completing its first manufacturing facility close to the battery plant. It’s not a surprise to learn that the Korean OEM will be the first customer of the battery manufacturer.
More to come
Indonesia’s desire to get the most out of their nickel reserves doesn’t stop with the South-Korean collaboration. A new project has already kicked off, this time with China’s CATL, again a battery manufacturer.
It remains to be seen to what extend the shortened supply chain will bring benefits to the South-Korean and Chinese OEMs. EU and US manufacturing already depend on Asia-based supply and seem to weaken their position on the global market by allowing a de facto oligarchic supply chain built around Asian providers. It will be interesting to watch how the trade balance game will be played in the next few years.
Find out more about electrification and fleet management more in general, both in the Asia/Pacific region and worldwide. Go to the Global Fleet Conference website to watch the Global Fleet Live Sessions and Regional Streams about Asia/Pacific on-demand.
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