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Lithium Trade Opportunities: Indonesia-Australia Partnership

InCorp Editorial Team

• 26 October 2023

• 5 minute reading time

Indonesia and Australia have solidified their partnership for lithium trade, fueling hopes for a greener and more sustainable future. The move is made to capitalize on the global demand for lithium surging due to its vital role in electric vehicle batteries and energy storage solutions.
This collaborative effort between the two nations holds immense economic growth and environmental preservation potential. As businesses eagerly explore avenues to participate in this market, understanding how to invest in lithium becomes a key point for those seeking to thrive in the growing lithium industry.
have 400,000 electric four-wheelers and 1.8 million battery-powered vehicles by 2025. The growth of EVs in Indonesia has been evident in recent years.
The growth is supported by the increasing number of two-wheeled EV units, from 1,947 in 2020 to 26,000 units by the end of 2022. While the four-wheeled EVs experienced an even more significant increase, with a 33-fold rise from 230 units in 2020 to 7,600 units in 2022.

A joint study by AC Ventures and e-mobility association AEML indicates that Indonesia’s electric vehicle ecosystems will gain a better market. The report highlights that the automotive research and development (R&D) and manufacturing sectors offer the most extensive total available market, presenting an opportunity of USD 12.5 billion to USD 15 billion by 2030.
Given the positive outlook and ambitious target for EV development, the government also considers securing the critical minerals for EV battery production as the most important component for EVs.

The Indonesian government is planning to secure an additional 60,000 tonnes of lithium per year from Australia to support the development of a comprehensive EV industry in Indonesia.
This additional quota would double the previous agreement between the two countries. Indonesia is expected to get 120,000 tonnes of lithium from Australia annually.
Indonesia holds the world’s largest nickel reserves, a significant advantage as the country aims to become a global EV production hub. However, it lacks domestic lithium supplies, which is equally crucial for EV batteries.
On the other hand, Australia possesses 53% of the world’s lithium output, making it a valuable source for Indonesia’s lithium needs.
This trade partnership is expected to meet the increasing demand for EV batteries in Indonesia. The country’s annual battery demand is projected to reach 20.1 gigawatt-hour (GWh) by 2030 and rise to 59.1 GWh by 2035

Conclusion

The Indonesia EV industry is gaining momentum following the trade partnership with Australia for lithium supply. This collaboration is set to fulfill Indonesia’s demand for lithium and aid in developing EV batteries, benefiting from Australia’s vast lithium reserves.
The growth of the EV industry in Indonesia creates various business and investment prospects. Companies aiming to capitalize on the expanding EV industry’s potential can seek assistance from InCorp Indonesia, especially for company registration and business licensing.
InCorp Indonesia has a decade of experience and a vast network, offering a wide range of market entry and corporate services to domestic and international clients looking to expand and operate in Indonesia and the broader Southeast Asia region.