Battery Making in Indonesia Can Cost Less than in China

This article first appeared on the BNEF mobile app and the Bloomberg Terminal.

  • Nickel and cobalt account for 22% of battery pack costs
  • Indonesia industrial electricity prices 11% lower than China

Indonesia’s desire to move up the value chain and leverage its nickel wealth into becoming an EV and battery manufacturing hub is supported by the fact that it may have the lowest manufacturing costs in Asia.

The country has some of the lowest labor costs and industrial power prices in Asia, supported by government subsidies. Labor and electricity account for around 6% of total battery pack costs. Indonesia is also endowed with reserves of nickel and cobalt, key battery raw materials which make up 22% of total battery pack costs.

BloombergNEF estimates that total battery pack manufacturing costs in Indonesia can be 8% lower than in China.

One downside to Indonesia’s low electricity price is its grid carbon intensity, which is one of the highest in the region at 711 grams of CO2/kWh. This may turn away manufacturers looking for low carbon energy sources for their plants. However, the country aims to develop new hydro and geothermal power projects that it says will be able to supply the industry with cheap, low-carbon electricity.

Clients can find the full report “Can Indonesia Turn Nickel into EV Gold?” on the Terminal or on web.  

BNEF Shorts are research excerpts available only on the BNEF mobile app and the Bloomberg Terminal, highlighting key findings from our reports. If you would like to learn more about our services, please contact us.

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us