Indonesia Battery Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Indonesia Battery Market Trends and Insights

Abundant Domestic Nickel Resources Enabling Downstreaming Policy

Indonesia produced 2.2 million t of nickel in 2024, equal to 59% of global output, while its 2020 ore-export ban forced in-country processing, expanding smelter count from 2 to 44 within eight years. The policy attracted USD 32 billion in pledged battery-chain capital but concentrated 61% of refining capacity with Chinese firms, creating dependency on foreign know-how. ESG pressure around HPAL’s 20–25 kg CO₂-equivalent profile now compels renewable power integration, increasing project capex.^{[2]Government of Indonesia, “Mineral Downstream Roadmap,” go.id} CATL’s USD 6 billion Karawang complex illustrates the shift, linking nickel feed through closed-loop recycling to meet strict export-market traceability rules.

Surge in EV & e-Motorcycle Investments Backed by Fiscal Incentives

Jakarta allocated IDR 7 trillion subsidies, cut VAT from 11% to 1%, and waived import duties for qualifying models, lifting 2024 EV sales 73% year-over-year to 44,557 units. Yet total cost-of-ownership parity still needs 84 km daily mileage versus the current 34 km average, so up-front subsidies stay critical. TKDN thresholds jump to 60% in 2027 and 80% in 2030, pushing OEMs to localize packs and motors; Hyundai-LG’s 10 GWh line and BYD’s 150,000-unit plant are early movers. Ride-hailing fleets showcase battery-swap viability, with Grab and Gojek fielding 10,000+ two-wheel EVs across eight cities, supported by 1,200 swap stations.

Rapid Uptake of Consumer Electronics and IoT Devices

Indonesia’s smartphone and connected-device boom supports steady demand for small-format lithium-ion cells even as global share tilts to EVs. PT International Chemical Industry shifted from alkaline staples to lithium production under the ABC brand, mirroring wider retooling among legacy dry-cell makers. Domestic pack assembly benefits from supply-chain diversification out of North-East Asia, yet lack of local lithium and cathode precursor production caps upstream gains.

Utility-Scale Energy-Storage Tenders to Balance Renewables

PLN’s 2025-2034 plan calls for 10.3 GW storage, with 3.5 GW to be online by 2030, spurring bids from CATL, Rept Battero, and CLOU Electronics. A 50 MW solar-plus-14.2 MWh BESS project in Nusantara proved cost savings of 30-40% on diesel peaking. Still, the absence of a capacity market forces merchant-risk models, delaying green-island deployments.

Dependence on Imported Lithium Salt & Precursor Chemicals

With no economic lithium reserves, manufacturers import carbonate and hydroxide mainly from China and, since August 2025, Australia, exposing cost bases to price swings that ranged USD 6,000–83,000 t between 2020 and 2024.^{[3]International Renewable Energy Agency, “Lithium-ion supply–demand update 2025,” irena.org} CATL’s Karawang hub can process 30,000 t cathode annually but still needs imported feed, limiting margins. China’s graphite export controls add another layer of supply-chain fragility, prompting UNOPS to urge stockpiling and recycling mandates, none legislated yet.

Patchy Charging / Swap Infrastructure Outside Java Corridor

Indonesia had only 588 public chargers nationwide by end-2022, mostly in Jakarta, Bandung, and Surabaya, versus PLN’s 7,146-unit goal for 2030. A 2024 PwC survey showed 65% of consumers see limited infrastructure as the top EV barrier. Swap networks mitigate urban anxiety but require land, cooling, and battery inventory, making payback tough in low-density regions. Grid codes for third-party chargers remain unpublished, delaying private investment beyond Java.

Segment Analysis

By Battery Type: Rechargeable Cells Dominate Value and Volume

Rechargeable cells secured 91.3% Indonesia battery market share in 2025 and will expand at a 13.1% CAGR to 2031, lifted by EV mandates and renewable-balancing storage. Primary formats face structural decline as consumers migrate to USB-rechargeable devices. CATL, Hyundai-LG, and BYD installations bring Indonesia battery market size for secondary cells toward the government’s 140 GWh 2030 target, though lithium-import exposure endures. Regulation No. 69/2024 raises safety hurdles for primary cells, accelerating consolidation among low-cost importers.

Legacy dry-cell leader PT Intercallin hedged by adding lithium output, while niche primary use persists in remote controls and medical devices. Yet rechargeable uptake in off-grid solar lanterns and rural devices erodes even these pockets. Pressure on lead-acid starter-battery lines also rises as premium car segments adopt lithium-ion SLI replacements.

By Technology: Lithium-Ion Leads, Solid-State Emerges as Long-Term Disruptor

Lithium-ion held 60.2% share in 2025 and anchors most near-term growth; Indonesia battery market size for lithium-ion packs will expand as Karawang and Karawang-adjacent clusters ramp to 26.9 GWh by 2026. Lead-acid units retain dominance in aftermarket SLI but cede ground in motive and renewable storage due to lower energy density. Solid-state prototypes, though nascent, register a 20.9% CAGR on pilot shipments, hinting at 400–500 Wh/kg horizons by decade-end.

National Battery Research Institute prioritizes solid-state R&D, yet commercial tooling hurdles—high sintering temperatures and dendrite management—delay mass rollout. Sodium-ion has potential to cut lithium dependence as soda ash is plentiful, but 95% of global capacity announcements sit in China, leaving Indonesian access uncertain. Flow batteries and sodium-sulfur remain niche for >4-hour grid use, adopted case-by-case in isolated diesel grids under donor funding.

Note: Segment shares of all individual segments available upon report purchase

By Application: Automotive Segment Outpaces Industrial and Portable

Automotive batteries captured 37.6% value in 2025 and are set for a 15.5% CAGR to 2031, the quickest across end uses. Indonesia battery market share for EV packs will climb as Hyundai-LG, BYD, and Polytron escalate localized sourcing. Industrial segments—motive, telecom, UPS—see mid-single digit growth, while portable devices gradually cede volume share as packs become non-replaceable.

Government targets of 600,000 electric cars and 13 million e-motorcycles by 2030 equate to 36.8 GWh annual pack demand, dwarfing the 10 GWh operational capacity in 2025. Polytron’s battery-subscription SUVs illustrate how lower entry costs can unlock middle-class demand, though dependence on Chinese LFP cells limits deep local value capture. Power-tool battery growth hinges on industrial diversification, yet no Indonesian cell maker has announced dedicated high-drain cylindrical lines, keeping imports high.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Java dominates production, hosting CATL, Hyundai-LG, BYD, and Polytron facilities, thanks to ports, skilled labor, and proximity to auto OEMs. Upstream nickel lies 1,500 km east in North Maluku and Central Sulawesi, forcing inter-island logistics that inflate costs and carbon footprints. CATL’s dual-site model moves mixed hydroxide precipitate by sea to Karawang, balancing ore proximity with downstream clustering.

Sumatra and Kalimantan lag in both factories and chargers, yet house high renewable potential suitable for microgrids. PLN’s 10.3 GW storage goal directs initial deployments to diesel-heavy outer islands, but tariff frameworks remain undefined, slowing build-out. Government swap-station targets imply eventual spread beyond the current eight-city footprint, but capital recovery remains uncertain in sparsely populated provinces.

Export-oriented growth depends on meeting EU battery-passport and U.S. IRA rules. Heavy Chinese investment complicates North American market access, while EU carbon-footprint caps raise pressure for renewable-powered smelting. Indonesia Battery Corporation is courting non-Chinese partners to diversify offtake and mitigate tariff risk, though no deals were confirmed by end-2025.