Indonesia Battery Market By Type (Primary Battery, Secondary Battery), By Chemistry (Lithium-Ion, Lead-Acid, Zinc-Manganese Dioxide, Nickel-Metal Hydride, Others), By Application (Automotive, Industrial, Portable), By Region, Competition Forecast & Opportunities 2029F

The Indonesia Battery market is predicted to grow during the forecast period, 2024-2028 owing to various driving factors, such as the rising adoption of EVs vehicles in comparison to petrol & diesel vehicles. The growing population directly enhances the need for consumer electronics, including tablets, cellular phones, smartwatches, among others, which is also contributing to the market growth.

A battery is a device that transforms the chemical energy directly into electrical energy via an electrochemical oxidation-reduction reaction. This kind of reaction involves the transfer of electrons from one material to another with the help of an electrical circuit. These batteries are charged with the help of electric current. Batteries are divided into various types, for instance, lead-acid batteries, lithium-ion batteries, nickel-metal hydride (NiMH) batteries, nickel-cadmium (NiCd) batteries, nickel-zinc (NiZn) batteries, flow batteries, among others. Also, multiple electrochemical cells that are connected to external inputs and outputs are used to make the batteries. Batteries have the capability to tackle one of the most important social, economic, and scientific challenges of the 21st century - the ability to store electrical energy for decentralized stationary or mobile applications.

There is a growing requirement for energy backup due to the rising demand for uninterrupted power supply across the country. In the case of power outages, batteries serve as a backup power source. The rechargeable and scalability features of the batteries are the two major advantages. The need for a reliable supply has increased, necessitating a growing need for energy backup across the country. Batteries are provided as a backup power source during power interruptions or periods of heavy demand.

The extended operating life and low maintenance needs of batteries are further advantages. The development of renewable energy sources like solar and wind has increased demand for these batteries, which has a detrimental effect on the battery business. Batteries are generally used for energy storage by utility corporations. This serves as a market driver for the Indonesia battery market, coupled with the additional benefits of longer operation time and longer life.

Additionally, Indonesia is putting strategic focus on battery and EV production. The country has aimed to become a market leader by leveraging its geographic proximity to Asian market leaders as well as upstream mineral and metal supplies. Indonesia is attracting investments from major battery and EV manufacturers such as Great Wall Motors, Foxconn, LG Group, and CATL.

Indonesia to Become The Largest Lithium-ion Battery Manufacturing Hub Across the Southeast Asia in the Upcoming Years

Indonesia is on track to become the hub of battery manufacturing, including lithium-ion and its components, thanks to its abundant raw material resources, such as cobalt and nickel, and investments from various global companies. Indonesia has long been known for its wealth of raw mineral resources, with nickel being the main draw for manufacturers looking to set up shop domestically. As of 2021, 25% of the world's known nickel resources are located in Indonesia, making the country the largest global producer of Class 2 nickel, producing over 1 million metric tons. In the past decade, Indonesia has shifted its focus to Class 1 nickel production, which is used in the battery industry. While Indonesia ranks among the top countries for this type of nickel, it still lags behind Canada, Australia, and China in terms of mining capacity, currently at around 100,000 tons. However, by 2027, the country is expected to reach nearly 195,000 tons, surpassing Canada and Australia. This will have a positive impact on Indonesia's battery market in the upcoming years. In addition to its strength in mining, Indonesia is now looking to expand its refining capacity for battery-grade chemicals. Currently, it has around 800 tons of manganese sulfate capacity, but several new projects are expected to come online within five years, significantly increasing the country's refining capabilities.

Furthermore, investments in the battery sector are likely to propel the Indonesia battery market in the upcoming years. For instance

• In May 2023, the government invested around USD 32 billion in projects tied to the battery supply chain, to be completed by the end of 2026. The country is rich in natural resources, including nickel, which is used in batteries for electric vehicles (EVs). The government aims to attract more investment in the nickel downstream sectors to boost economic growth. Additionally, the Kalimantan region received USD 12.35 billion in investment, North Maluku could attract USD9.78 billion, and Sulawesi could see an inflow of USD9.84 billion in battery supply chain projects.
• In May 2023, the British Retail Consortium, including mining giant Glencore, invested approximately USD 9 billion in Indonesia's mining and electric vehicle (EV) battery sectors.

Increasing Battery Demand in Various Industries Across the Country

Automotive Industry

Electric Two-Wheeler (E2W) adoption increased five times between 2020 and 2022. With the impending USD 4.7 thousand cost reduction, the E2W adoption outlook is anticipated to be higher from 2023 onwards, especially since some E2W models are priced in the same range as their best-selling ICEV counterparts. As the domestic industry is also rising, mainly the E2W battery industry and E2W manufacturing, costs are expected to decrease in the upcoming years. The total cost of ownership (TCO) of E2W is expected to decline by 9% per year between 2022 and 2030.

Aviation Industry

In the aviation industry, electric aircraft are also limited by the low energy density of batteries, which affects the cruise range. The current certified electric aircraft has an energy density of 144 Wh/kg, but research into advanced battery technologies aims to increase this to 500 Wh/kg. Aircraft manufacturers worldwide are developing electric aircraft designs, particularly in the VTOL segment, which are expected to enter the commercial market in the next few years.

Marine Industry

Maritime battery-powered vessels are currently limited by their low energy density compared to other alternatives. This results in a reduction in cargo space, making battery-powered boats practical only for short-distance trips and small gross tonnage. Several SMEs in Indonesia have innovated by developing battery-powered boats for the small-scale fishery sector, which is economically challenged by reduced access to subsidized fuel.

Recent Developments

• The Indonesia Battery Corporation, a state-owned battery manufacturer, was formed in March 2021 by the Ministry of State-Owned Enterprises and four other state-owned entities. The investment needed for this holding is Indonesian rupiah (IDR) 238 trillion (USD 17 billion). The corporation's production target is up to 140 GWh of battery cells by 2030, of which 50 GWh will be for export. For context, the current global battery production capacity is about 871 GWh. A memorandum of understanding (MoU) was signed in July 2021 for an EV battery factory between the Ministry of Investment and Hyundai Motor Company with a capacity of 10 GWh, with a price tag of USD 1.1 billion. The factory, to be built with Korean LG Group, aims to incorporate battery precursor production with pack production, as well as mining, smelting, and recycling facilities. This deal is part of a larger MoU signed by Indonesia's government and a consortium led by the LG Group for USD 9.8 billion to develop integrated EV supply chains. The consortium signed a non-binding agreement with PT Aneka Tambang Tbk, the state-owned mining company, and Indonesia Battery Corporation.
• In January 2023, Tesla announced that the company was close to signing a preliminary agreement to build a factory in Indonesia. Under the contract, the company is anticipated to establish a factory designed for an annual production of one million electric cars.
• In June 2022, Korean Trade Insurance Corporation (K-Sure) approved a USD 711 million term loan facility to support the development of a battery manufacturing facility in Indonesia for electric vehicles (EVs).
• Additionally, other potential deals include a USD 5 billion lithium battery plant with projected production in 2024 between China's Contemporary Amperex Technology (CATL) and Indonesia's PT Aneka Tambang.

Market Segmentation

The Indonesia Battery Market is segmented into type, chemistry, application, region and competitive landscape. Based on type, the market is divided into primary battery and secondary battery. Based on chemistry, the market is divided into lithium-ion, lead-acid, zinc-manganese dioxide, nickel-metal hydride, and others. Based on application, the market is segmented into automotive, industrial, and portable. Based on region the market is divided into

Company Profiles

PT. Yuasa Battery Indonesia, PT Century Batteries Indonesia, FPT Furukawa Electric Indonesia, Contemporary Amperex Technology Co. Limited, PT Motobatt Indonesia, PT FDK Indonesia, PT. New Indobatt Energy Nusantara, Energizer Holdings Inc, PT Battery Technology Indonesia (TWS), PT. Trimitra Battery Prakasa among others are the major players that are driving the growth of the Indonesia battery market.