The Indonesia battery market is expected to grow at a CAGR of more than 5.6% during 2020 - 2025. Factors such as the easy availability of raw materials, an increase in demand for industrial applications, and automobiles are driving the Indonesia battery market. In addition, the growing population, and increasing sales of consumer electronics such as mobile phones, laptops, etc. are likely to boost the battery market growth in the country. However, factors such as demand-supply mismatch of raw materials in the wake of the COVID-19 pandemic is likely to restrain the battery market.
- The lithium-Ion battery segment is expected to have significant growth in the Indonesia battery market during the forecast period.
- Indonesia has commitments to reduce CO2 emissions as much as 29% or around 303 million tons by 2030. As carbon emissions and dependency on fossil energy have become a major concern in Indonesia, the introduction of EV is seen as a possible solution, which, in turn, likely to provide an opportunity for the battery market in the future.
- Growth of EVs is expected to drive the Indonesia battery market during the forecast period.
Key Market Trends
Lithium-Ion Battery Technology to Witness Significant Growth
- The lithium-Ion battery is a type of rechargeable battery with high energy density and a high safety level. It is commonly used for portable electronic devices, power tools, and electric vehicles (EVs). With technological advancements, the Lithium-Ion batteries have undergone a tremendous transformation in their performance.
- Indonesia has large deposits of Nickel and Cobalt and both Nickel and Cobalt are important raw materials in the Lithium-Ion battery. Thus the readily available raw materials in Indonesia are likely to drive the lithium-ion battery market in Indonesia.
- The growth of the Lithium-Ion Battery market in Indonesia is likely to help the country achieve innovative sustainable energy and this is a big reason why the Indonesian Government is trying to reduce the cost of producing Lithium-Ion Batteries.
- The growing awareness in Indonesia for renewable sources of energy is driving the market for wind energy, solar energy and this also has an indirect positive impact on the Lithium-Ion battery market. This is because Lithium-Ion batteries are used as energy storage devices in these energy sources.
- Indonesia is also aiming to start making lithium batteries for use in electric vehicles (EVs) in 2023. Hence, this can lead to the substantial growth of lithium-ion battery share in the country's battery market.
Growth of Electric Vehicles (EVs) to Drive the Market
- In 2019, Indonesia set an ambitious target on the adoption of electric vehicles (EV) with 2.1 million e-motorcycles and 2,200 e-cars expected to take the road by 2025, which in turn is expected to drive the battery market.
- The Indonesian government put high hopes on e-motorcycles adoption, while the development of e-cars is directed at certain areas, such as tourist areas, industries, and offices. The government also aimed the EVs to be used as public transportation and operational vehicles.
- While the benefits of EV outweigh the fuel-based vehicles, EV in Indonesia has yet to gain its expected and maximum traction. The high dependency on fossil fuel as the main energy source for transportation sectors in Indonesia has resulted in several negative impacts, such as increasing state budget allocation, energy sustainability issues, and the high CO2 emission rate.
- As of 2019, Indonesia's carbon dioxide emission has reached 632.1 million tonnes of carbon dioxide from 497.9 million tonnes of carbon dioxide in 2015.
- Hence, growing need for EVs in the market is likely to drive the market for batteries in the country over the forecast period.
The Indonesia battery market is moderately consolidated. Some of the major key players in the market include PT Yuasa Battery Indonesia, PT Century Batteries Indonesia, PT Furukawa Indomobil Battery Manufacturing, NIPRESS Tbk, and PT Motobatt Indonesia.
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