TMTPOST – The world’s leading battery producer Contemporary Amperex Technology Co Ltd (CATL) will invest $1.2 billion in battery production in Indonesia.

CATL, the China-based battery giant, through its subsidiary CBL International Development, formed a joint venture with state-owned Indonesia Battery Corporation, Bloomberg reported, quoting a statement from the companies. 

The project in Karawang, West Java, aims to scale up battery production to 15 gigawatts a year, the report added. 

The move also marks an important step toward Indonesia’s goal to build out a complete supply chain for electric vehicles, a key aim launched by outgoing President Joko Widodo. 

The Indonesian government has engaged in leveraging its vast production of nickel, a key ingredient for some batteries, to attract foreign investments into the EV sector.

Earlier this year, Hyundai Motor Group and LG Energy Solution Ltd opened the first-ever battery cell plant in the country, while China’s BTR New Material Group launched an anode material plant, the report said. 

Chinese automakers such as BYD, Chery, SAIC, GAC Aion and Vietnam-based VinFast are setting up facilities in Indonesia, Maybank Research said in a note in August.

The research house said favorable regulations, local brands and penetration of Chinese carmakers will drive electric vehicle (EV) sales higher in ASEAN.

According to Maybank, ASEAN is witnessing growth in electric car sales, mainly in Malaysia, Indonesia and Vietnam.