ASIATODAY.ID, JAKARTA — Indonesia’s ambition to dominate the global electric vehicle (EV) supply chain through its vast nickel resources is facing a growing challenge as battery technology evolves beyond nickel-intensive chemistries.
Researchers from Indonesia’s National Research and Innovation Agency (BRIN) have warned that rapid advances in alternative battery technologies could reshape global demand patterns, potentially undermining parts of the country’s long-term nickel downstreaming strategy.
The warning comes as Indonesia continues to invest heavily in building a nickel-based EV ecosystem, a cornerstone of its industrial policy aimed at transforming the nation from a raw-material exporter into a major producer of battery materials and electric vehicles.
“Many new technologies are emerging. We must ensure that our policies can adapt quickly enough,” said Sigit Setiawan, a researcher at BRIN’s Research Center for Industrial, Services and Trade Economics, during a recent policy dialogue on Indonesia’s EV industry on June 24.
According to BRIN, the global battery industry is not converging toward a single dominant technology. Instead, multiple battery chemistries are competing across different market segments, creating uncertainty for countries that have concentrated investments in specific raw materials.
The development presents a strategic dilemma for Indonesia. While Jakarta has built much of its EV industrialization strategy around nickel processing and battery production, global markets are increasingly embracing alternative technologies that require less nickel—or none at all.
Among the emerging competitors is sodium-ion technology, which uses abundant sodium instead of nickel and offers the potential for lower production costs. Industry analysts view sodium-ion batteries as particularly attractive for entry-level EVs and stationary energy storage applications.
At the same time, Lithium Iron Phosphate (LFP) batteries continue to gain market share worldwide because of their lower cost, long lifecycle, and improved safety profile. Unlike conventional nickel-rich battery chemistries, LFP batteries do not require nickel as a primary material.
BRIN also highlighted the growing development of Lithium Manganese Iron Phosphate (LMFP) and solid-state batteries, technologies that could further diversify the global battery landscape.
“The dominance of LFP and the rise of LMFP in mass-market EVs and energy storage could directly reduce future nickel demand,” Sigit said.
The shift comes at a critical moment for Indonesia, which has become the world’s largest nickel producer and has attracted billions of dollars in foreign investment into smelters, battery materials, and EV manufacturing facilities. Indonesia currently remains central to global nickel supply and downstream processing ambitions.
According to BRIN, the risks extend beyond commodity demand. A faster-than-expected transition toward alternative battery technologies could lead to excess production capacity, downward pressure on nickel prices, and declining returns on investments tied to nickel-focused industrial projects. Concerns over oversupply and market volatility have already emerged within Indonesia’s nickel sector.
The agency argues that Indonesia’s long-term competitiveness will depend not only on mineral resources but also on its ability to build technological capabilities, strengthen manufacturing expertise, and expand research and development.
Industry competitiveness remains another challenge. Battery manufacturing requires large amounts of energy, strict production standards, and highly efficient operations.
Indonesia must also respond to growing international pressure for lower-carbon manufacturing and stronger sustainability standards across EV supply chains. Recent discussions within Indonesia’s battery sector have increasingly focused on sustainability and circular-economy requirements demanded by global markets.
To remain competitive, BRIN recommends a more flexible industrial strategy that supports multiple battery technologies rather than relying solely on nickel-based chemistries. This includes expanding research into alternative materials such as manganese, supporting next-generation battery innovation, and strengthening domestic technological capabilities.
“The goal should not be to build an industry around a single commodity,” Sigit said.
“The priority is to create an innovative and adaptable industrial ecosystem.”
For Indonesia, the future of its EV ambitions may ultimately depend less on the size of its nickel reserves and more on how quickly it can adapt to the next wave of technological disruption transforming the global battery industry. (AT Network)
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