Market Trends of Indonesia Battery Industry
Lithium-ion Battery Technology is Likely to Witness Significant Growth
- The lithium-ion battery segment is expected to grow significantly during the forecast period due to its high energy density, fast recharging capability, and high discharge power. Lithium-ion batteries are the only available technology that meets OEM requirements for vehicle driving range and charging time.
- Indonesia is witnessing strong growth in the demand for 4G-enabled smartphones, mainly due to their availability in the ultra-low-end (<USD 100) segment. This has resulted in an increase in the demand for lithium-ion batteries in Indonesia's domestic battery market, which has propelled the demand for batteries in the market during the forecast period. Furthermore, the low cost is expected to drive the sale of smartphones, thus driving the demand for the market studied.
- Indonesia has an abundance and wide variety of renewable energy resources. Therefore, the government has set ambitious targets for renewable energy to meet its targets of greenhouse gas emissions in the energy sector and increase national energy security. The National Energy Policy (KEN) and Plan (RUEN) are planning to generate 23% of the total energy consumption from renewable energy resources by 2025, and the draft of the National Electricity Plan (RUKN) targets to generate 25% of renewable electricity for the power sector by 2025. The renewable energy capacity reached 12.6 GW in 2022, with a growth rate of 9.4% from the previous year. Thus, such government initiatives are likely to drive the battery market in the country during the forecast period.
- In August 2023, the Indonesian government announced that Tesla is planning to invest in the manufacture of battery materials in the country. Specifically, the company wants to invest in the manufacturing of materials for lithium batteries.
- Thus, lithium-ion battery technology is likely to witness significant growth due to immense benefits over other batteries, increasing investments in setting up manufacturing facilities, and the growing renewable sector in the country.
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Upcoming Manufacturing Facilities and Increasing Demand for Vehicles Including EVs are Driving the Market Demand
- Indonesia has seen increased investments in the battery market, majorly in the form of manufacturing facilities, owing to an increase in the number of electric vehicles in the country.
- For instance, in September 2023, REPT Battero and POWIN teamed up with a 320-ah wending energy battery for an 8.4 gwh Indonesian cell procurement project.
- In August 2023, the Indonesian government announced that the country is projected to become the country with the largest electric vehicle (EV) battery industry in the world. This is due to the downstream of natural resources, especially raw materials for EV batteries, and the government's efforts to attract foreign investors.
- In September 2023, The Indonesian Chamber of Commerce and Industry (Kadin) announced that it was looking at an opportunity to develop electric vehicles or EV batteries with Latin American countries, including Argentina, Chile, and Peru.
- Additionally, the Association of Indonesia Automotive Industries reports that Indonesian electric car sales jumped to over 10,000 vehicles in 2022 from around 600 in 2021. Similarly, 1,470,146 motor vehicles were sold in Indonesia in 2022, an increase of approximately 582,941 units from 2021.
- Overall, the aforementioned factors are expected to drive the market during the forecast period.
