Jakarta, INTI - Indonesia's ambition to become a major player in the global electric vehicle (EV) industry faces new challenges with the rapid development of battery technology. Amid efforts to build a nickel-based EV industry ecosystem through downstream processing, the global market is instead beginning to adopt various alternative battery technologies that are not entirely dependent on nickel.
"From several discussions with the speakers, many new technologies have emerged. We must not be late in adapting to these new technologies," said Sigit Setiawan, a researcher from BRIN, during a webinar on Wednesday, June 24, 2026.
Sigit explained that BRIN's study shows that the electric vehicle industry is not moving toward a single battery technology. Instead, various technologies continue to develop and compete according to market needs and their respective advantages.
This situation creates a paradox for Indonesia. The government has encouraged significant investment in building a nickel-based electric vehicle supply chain. However, the global electric vehicle market is shifting toward alternative battery technologies.
"Indonesia is building a nickel-based EV industrial ecosystem through downstreaming, while the global and domestic EV markets are simultaneously shifting to other battery technologies," he said.
Alternative Battery Material
One technology attracting attention is the sodium-ion battery. This battery utilizes more abundant sodium and has the potential to offer lower production costs than some nickel-based battery technologies. If it can develop and dominate certain market segments, this technology has the potential to reduce nickel demand for electric vehicle applications.
Furthermore, the development of solid-state batteries, Lithium Iron Phosphate (LFP), and Lithium Manganese Iron Phosphate (LMFP) also indicates a shift in the direction of the global battery industry. According to Sigit, LFP technology is increasingly being used because it has lower production costs, a long lifespan, and does not require nickel as a primary ingredient.
"The dominance of LFP and the development of LMFP in the main electric vehicle and energy storage segments could directly reduce nickel demand," he said.
Risks for Nickel-Based Batteries
This changing technological landscape carries some risks for investments already directed toward nickel-based industries. These risks include potential overcapacity in production, pressure on nickel prices, and the possibility of declining industrial asset values if global technology evolves in a different direction.
"The problem is not simply how to increase production of one type of material, but how to build an ecosystem that can keep pace with technological changes," he stressed.
Battery production requires large amounts of energy, stringent manufacturing standards, and high cost efficiency. Tropical climates that require controlled temperature and humidity in production facilities also increase operational costs. Meanwhile, the global market is increasingly demanding the use of low-carbon energy in manufacturing processes.
Sigit also highlighted the dominance of other countries in the global battery supply chain. Therefore, Indonesia cannot simply rely on its superior mineral resources. It also needs to strengthen its technological, manufacturing, research, and development capacity for supporting components for electric vehicles, including software and battery management systems.
Conclusion
Indonesia's strategy for developing a nickel-based electric vehicle industry needs to be more adaptive to developments in global battery technology. The current electric vehicle market relies not only on nickel-based batteries but is also shifting to alternative technologies, such as sodium-ion batteries, Lithium Iron Phosphate (LFP), LMFP, and solid-state batteries. This situation poses risks to nickel-based industrial investments, such as excess production capacity and price pressures. To maintain competitiveness, Indonesia needs to develop a more flexible industrial strategy.
Read more: Stadler Rail Expands Train Manufacturing Base in Indonesia