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Bahlil denies nickel being less popular than LFP batteries

Jakarta Globe - January 24, 2024

Jayanty Nada Shofa, Jakarta – Nickel-based batteries are still not losing popularity to lithium ferro-phosphate (LFP) in the electric vehicle (EV) market, according to Investment Minister Bahlil Lahadalia.

Indonesia has been banking on its gigantic nickel reserves as a means to penetrate the global EV supply chain. But Thomas Lembong, a senior member of the Anies Baswedan presidential campaign team, said earlier that EV giant Tesla was shifting from nickel-based batteries to the much cheaper, China-made LFP batteries.

Vice presidential candidate Gibran Rakabuming, who had promised to carry on existing policies on Indonesian nickel, brought up Thomas's criticism at Sunday's debate. Gibran asked his rival Muhaimin Iskandar – Anies' ticket mate – whether he was "anti-nickel" just like Thomas. This later made the "nickel-based batteries versus its LFP counterparts" a hot topic.

Fast forward to Wednesday, Bahlil tried to dispel doubts over nickel's popularity following Thomas's comments. "So it is a lie that the [EV industry] is leaving nickel," Bahlil told reporters in Jakarta on Wednesday.

Bahlil then compared LFP and NMC – an EV battery type that combines nickel, manganese, and cobalt. He added: "Tesla is only using LFP batteries for its standard models. Because NMC-powered cars can travel longer distances [compared to their LFP counterparts]. Some Tesla cars are still using nickel-based batteries."

EV producers Hyundai, Tesla, Volkswagen, Volvo, and BMW, among others, are using NMC batteries. Cars produced by BYD, Wuling, and Chery, use LFP batteries. Tesla only uses LFP for its vehicles made in China. Ford adopts both LFP and NMC batteries, according to the Investment Ministry.

Slides shown during the presser revealed that LFP-powered cars could travel about 700 kilometers, versus NMC's 1,000-kilometer range. An LFP battery is cheaper at an average price of $70-80/KWh. This is about 20-30 percent less compared to NMC's price range of between $90 and $100/KWh.

Indonesia reported that it had attracted approximately $42 billion in investment for its EV battery ecosystem. About $9.8 billion came from South Korean battery manufacturer LG Energy Solution. China's CATL has also invested $5.2 billion in the ecosystem.

Henchman for other countries

China is the world's largest phosphate producer. Phosphate represents 61 percent of LFP battery content. Indonesia, however, does not produce this rock. About 80 percent of NMC is made of nickel, according to the Investment Ministry. Indonesia is home to the world's largest nickel reserves, standing at 21 million metric tons.

In 2020, Indonesia stopped exporting unprocessed nickel ores in a move to build an EV battery ecosystem. The export ban angered the stainless steel-producing European Union (EU) who later sued Indonesia at the World Trade Organization (WTO).

The International Monetary Fund (IMF) last year even asked Indonesia to phase out export restrictions and refrain from replicating the ban on other commodities. Indonesia's nickel domestic processing policy is also starting to receive criticism from politicians at home, including Thomas.

"Let me ask you this: do we want to focus on developing our natural resources or promote other countries' products?" Bahlil said.

"Remember how the IMF told us to not ban exports of unprocessed ores? Be careful. I'm connecting the dots here. Don't let any foreign country's henchman disrupt our public policies," Bahlil said.

Thomas headed the country's investment agency during President Joko "Jokowi" Widodo's first term.

Source: https://jakartaglobe.id/business/bahlil-denies-nickel-being-less-popular-than-lfp-batterie