Tsingshan unit plans Indonesian battery plant as trade frictions mount

REPT BATTERO Energy Co Ltd’s first overseas battery factory will be housed alongside Tsingshan’s existing operations in Weda Bay and could begin operating as soon as next year. The intention is to steal a march on rivals planning new capacity elsewhere in the world, and take advantage of its parent for raw materials and infrastructure. Locating in Indonesia could also head off concerns over trade frictions that threaten to disrupt exports from China.

“Many battery manufacturers are building factories and ramping up in Europe and North America, but we expect their capacity will only operate from around 2026 or after,” Jason Hong, US general manager of REPT, said in an interview. “We want to get ahead of them with the factory in Indonesia.”

China is one of Indonesia’s top investors, spending more than US$7 billion there last year, with much of the cash deployed on building out processing facilities for the nation’s abundant reserves of raw materials. Jakarta has ambitions to develop as a hub for electric vehicles (EVs), a sector in which China leads in terms of sales. Indonesia is the world’s biggest miner of nickel and No. 2 for cobalt, ingredients crucial to the production of EV batteries.

REPT began by selling batteries for energy storage systems, but has since expanded to carmakers including Stellantis NV, Li Auto Inc and SAIC Motor Corp. It ranked as China’s No. 9 in terms of EV battery installations in the first two months of 2024, up from No. 11 last year, according to China Automotive Battery Innovation Alliance.

China’s dominance in EVs and the processing of many critical minerals has drawn scrutiny from trade officials in the US and European Union. Hong said policy uncertainty is potentially an issue for the company, and putting a factory in Indonesia could help mitigate the threat.

“Labour and power costs in Indonesia are similar to China,” said Hong. “Tsingshan has comprehensive infrastructure built, and its extensive experience in the country would help with budget estimates,” he said. “We also have a good relationship with the Indonesian government, which is supportive of new energy sectors.”