Analysts Highlight Factors That Could Drive Down Electric Car Prices

KatadataOTO – A number of electric cars in Indonesia are sold using lithium-ion NMC batteries, such as the Hyundai Ioniq 5 and the New Kona Electric. Meanwhile, Chinese brands prefer to use LFP because it offers several advantages.

LFP batteries are claimed to be safer and cheaper than lithium-ion, which is one of the reasons why the price of Chinese electric cars can be competitive compared to similar models in their class.

However, Indonesia has the largest nickel reserves in the world. Economic observers believe that nickel downstreaming needs to continue so that it can be utilized by brands selling EVs in the country, making their prices more affordable.

The government has indeed started to ban the export of nickel ore to attract domestic smelter investment.

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However, most investors, especially those from Chinese brands, use LFP batteries instead of NMC.

“What is happening now is that some EV (Electric Vehicle) industry players are actually using LFP, and this should be noted. Meanwhile, for NMC, the price development of the cars tends to be expensive,” said Josua Pardede, Chief Economist of Permata Bank at JIExpo Kemayoran some time ago.

According to him, the existing nickel downstreaming policy can be continued, so that industry players who use NMC batteries for their electric vehicle lines can utilize domestic nickel content.

Not only does it help to reduce the price of electric cars, but the policy is also expected to support the government's vision of including Indonesia as a battery supplier in the global EV industry.

“So, the existing nickel downstreaming in Indonesia must be continued with the current conditions,” Josua emphasized.

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For your information, the majority of Chinese factories in Indonesia use LFP batteries for the products offered to consumers. The prices range from around Rp 179 million to over Rp 400 million.

For example, Wuling. The Air ev to the BinguoEV are equipped with power source components with capacities from 17.3 kWh to 37.9 kWh to support a journey of 300 km-400 km on a single charge.

Similar to Wuling, the Chery Omoda E5 also uses an LFP battery with a capacity of 61 kWh and a claimed range of 61 kWh.