Owner Or Owned? Indonesia's Chinese Battery Chain Dilemma

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The planned Indonesia Battery Integration Project involving Chinese battery maker CATL's subsidiary CBL, Indonesia's state-owned miner Antam and Indonesia Battery Corporation shows the scale of the ambition. The nearly US$6 billion project is designed to span nickel mining and processing, battery materials, cell manufacturing and recycling.

Its first battery plant is expected to have 6.9 GWh of annual capacity, with plans for expansion. For Indonesia, this is a major step beyond exporting raw materials. But it also raises the harder question: who owns the capabilities embedded in this ecosystem?

If Indonesian firms remain dependent on foreign technology, machinery, engineering expertise, intellectual property and management, downstreaming may change where production takes place without fundamentally changing who controls the knowledge behind it.

From Chinese investment to Indonesian capability

This does not mean Chinese investment is a problem. Indonesia probably cannot build a globally competitive battery industry quickly without Chinese capital, technology and industrial partners. The more consequential question is whether Jakarta can turn this dependence into a mechanism for learning.

The relationship is asymmetric but not one-sided. China needs Indonesian nickel and, increasingly, its market and strategic location. Indonesia needs China's capital, technology and manufacturing ecosystem. The result is a form of asymmetric interdependence, which gives Indonesia room to bargain if that space is leveraged intelligently.

The scale of Chinese involvement is already substantial. The International Energy Agency estimates that Chinese investment in Indonesia's nickel-refining sector reached about $30 billion in 2024, while Chinese companies accounted for roughly 75% of Indonesia's refining capacity.

Such concentration brings both opportunity and risk. Chinese firms can bring technologies, suppliers, engineering capabilities and access to global production networks faster than Indonesia could on its own.

But if the most valuable capabilities remain concentrated in Chinese companies, Indonesia could end up with a battery industry that is local in geography but foreign in technological ownership.

Indonesia should therefore look past the amount of foreign capital arriving and ask what it is actually being left behind. Are Indonesian engineers learning to design and improve production lines? Are local suppliers moving into more sophisticated parts and components?

Are universities and companies building serious battery research capabilities? Is intellectual property starting to accumulate at home? And, over time, can Indonesian companies become technology partners rather than remaining suppliers, junior joint-venture partners or providers of raw materials?

These questions may be less visible than the number of factories being built, but they will ultimately determine whether Indonesia is building an industry or simply hosting one.

Indonesia should also avoid locking its strategy into the battery technologies that dominate today. China itself is already looking beyond incumbent chemistries, with increasing attention to solid-state batteries and other next-generation technologies.

If Indonesia builds a sophisticated manufacturing base around today's technology but lacks the capacity to innovate when the technology changes, it could become trapped in a familiar pattern: moving up the value chain only to find that the frontier has moved again.

The real battery bet

The deeper opportunity, then, lies in using Indonesia's mineral advantage as bargaining power for technological upgrading, not just in making batteries.

Nickel should be treated as an asset that can win knowledge, skills, research partnerships, supplier development and technology transfer, not just factories. The aim should be to move from resource power to manufacturing power, and, ultimately, technological power.

That requires a broader definition of success. Gigawatt-hours produced matter, but so do the number of Indonesian engineers trained, domestic suppliers upgraded, patents developed, research partnerships created and local firms capable of competing without permanent technological dependence.

Other major battery economies offer key lessons. Japan shows that technological leadership can be lost when commercialization and industrial scale lag behind. Europe shows that regulation, subsidies and ambitious factory plans cannot by themselves guarantee competitive manufacturing.