Indonesia tightens state control over nickel to advance a fully domestic EV supply chain, even as global demand shifts away from nickel-heavy batteries.

Environmental and social costs are highlighted, including extensive forest loss from mining and pollution linked to large-scale mines, raising biodiversity and climate concerns.

Indonesia’s critical minerals position makes it a strategic hinge in US-China competition, with potential concessions like easing raw nickel export bans to attract US investment while balancing ties with China.

Public-private dynamics show mixed outcomes: early battery plant investments by Korea and China, but major projects face setbacks, even as BYD and CATL expand presence.

Efforts to build a fully domestic EV value chain face hurdles: limited local EV production and charging infrastructure, and a shift toward nickel-light or nickel-free chemistries such as LFP.

Ambitious investments faced delays and cost overruns: Hyundai-LG’s battery plant opened, but LG’s broader project was scaled back; BYD and CATL maintain ongoing factory plans.

Jakarta intends to use nickel control to support domestic EV value chain, but environmental and social costs persist, including deforestation and pollution from mining.

Crackdown on illegal mining and plantation licenses intensified in 2025, with seizures of millions of hectares and multibillion-dollar fines, signaling stricter governance.

Global nickel shipments show regional shifts and rising environmental concerns, including deforestation and smelter emissions tied to coal-fired operations.

Analysts warn that land seizures and regulatory actions could deter investment and create uncertainty in nickel mining and downstream processing, affecting long-term strategy.

Sulawesi hosts the world’s largest nickel reserves, underscoring Indonesia’s central role in the global nickel market.