By Michael Elkins
Indonesian investment minister Bahlil Lahadalia announced Sunday that Volkswagen (ETR:VOWG_p) will build an electric vehicle (EV) battery ecosystem in Indonesia and will partner with miner Vale (BA:VALE), Ford (NYSE:F), and China's battery minerals producer Zhejiang Huayou Cobalt (SS:603799).
Minister Lahadalia said on Sunday that Volkswagen, Europe's biggest automaker, will work with Vale, Ford, Huayou, French miner Eramet (EPA:ERMT), and several Indonesian firms like Merdeka Copper Gold (JK:MDKA), the parent company of Merdeka Battery, and energy firm Kalla Group.
Automakers have been courting Indonesia for its raw materials used in producing EV batteries, which account for about 40% of a vehicle's sticker price, aiming to cut costs.
The partnerships would consist of joint ventures and supply raw materials, Bahlil said in a video statement.
"Indonesia is an important and interesting country in terms of raw materials and we are in a positive exchange with the government and suppliers," Volkswagen said in a statement.
Last month, Ford inked its first investment in Indonesia by joining Vale Indonesia and Huayou in a $4.5 billion nickel processing plant in Southeast Sulawesi.
Volkswagen last month said it plans to invest €180B ($193B) over five years in areas including battery production and raw material sourcing.
Shares of F are up 0.24% in premarket trading on Monday.