In July 2024, then president Joko Widodo said Indonesia must “become a global player in the EV supply chain”. He was speaking at the inauguration of a Hyundai EV and battery factory in Karawang, West Java, where government officials declared the country’s commitment to strengthening its EV production “ecosystem”.
Indonesia, with its large supplies of several metals used in EVs – such as nickel, copper and bauxite – has taken several steps towards doing so. But in the background of these ambitions lie concerns about the nickel industry’s impacts on local communities. Experts say that without major changes to the law, local people will continue to suffer from impacts already documented in existing projects.
This is particularly the case in the province of North Maluku, where several key facilities of two major upcoming EV projects will be sited.
One project was inaugurated by current President Prabowo Subianto in June 2025. Dubbed “Dragon”, it is an attempt to build a full EV battery supply chain – from nickel mining to battery manufacturing. Government officials have claimed the US$5.9 billion undertaking is the largest of its kind in Southeast Asia.
Dragon is a joint venture between two state-owned companies – Aneka Tambang (Antam) and Indonesian Battery Corporation (IBC) – as well as Chinese battery giant CATL, or more precisely, a subsidiary called CBL.
The consortium will build five sub-projects in the East Halmahera regency of North Maluku, including facilities for nickel mining, extraction and processing, as well as a battery-recycling factory. It will also build a large-scale EV battery facility in Karawang, which is set to begin commercial operations in late 2026, national news agency Antara reported.
Another important project is called Titan. This integrated EV supply chain will be operated by Antam, IBC and commodities trading company Daaz Bara Lestari in concert with China’s Zhejiang Huayou Cobalt and EVE Energy. Titan has a slated capacity to produce 30 gigawatt-hours of batteries each year. Its smelter, refining, cathode and extraction facilities will also be built in North Maluku, reported Antara.
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We will lose if we only have the land but not the technology. We need to question who benefits the most from the investment. What about the local people?
Evvy Kartini, founder, National Battery Research Institute
A question of ownership
Projects like Dragon and Titan could signal a new era for Indonesia’s EV production, for which progress has so far been slow.
The country set a target to produce 400,000 EVs by 2025 and 600,000 by 2030. But by June 2025, Indonesia had produced just 25,861 electric cars since the start of that year.
While EV production has been sluggish, sales in the country are taking off, rising by 152.5 per cent in the first quarter of 2025 compared to the previous year, according to PwC. In the second quarter of 2025, about 24,000 EVs were sold, up from fewer than 150 in 2020, noted the International Council on Clean Transportation. The majority of those were made by Chinese manufacturers.
For some experts, these growing sales and foreign participation raise questions about ownership of the production technology. “When the government said Indonesia wants to be the biggest producer of electric batteries, we have to ask, who owns it?” said Evvy Kartini, founder of the National Battery Research Institute. “We can say that we are the biggest producer, but all of it is China-owned. [The production] only took place on our land. We sold our nickel-rich soil to them,” Evvy said.
She added that for Indonesia to build its own EV industry, it is crucial to transfer technology between foreign investors and local players and scale up research nationally. The government needs to support Indonesia’s researchers in developing its raw materials using technology owned by the country to decrease dependency on investors. “We will lose if we only have the land but not the technology,” she said.
“We need to question who benefits the most from the investment. What about the local people?”
She points to the country’s unemployment rate, saying it is crucial that the government invests in developing manpower resources so the EV battery industry can provide employment. “Now there’s still a missing link between the people and the industry.” Indonesia has one of the highest rates of unemployment in Southeast Asia, with a particularly high youth unemployment rate of 17 per cent as of October 2025.
Zulfikar Rakhmat is director of the China-Indonesia and Middle East and North Africa Desk at the Center of Economic and Law Studies, a research institution. He says the centre’s economic modelling projects that if the Dragon project is successful, “it will contribute to national gross domestic product [by] around 0.5 per cent to 1 per cent. The country could get US$3-5 billion per year, which is big”.
But for this to happen, there are things the Indonesian government must improve on, such as environmental standards and regulations, Zulfikar notes. “There must be a routine audit to make sure that everything is on track, especially on health and environment,” he said.
Zulfikar believes current ESG (environmental, social and governance) regulations are “not strong enough”. The mineral and coal mining law does require mining companies to meet environmental and social commitments including restoring areas they mine, as well as devise a plan for development and empowerment of surrounding communities. But according to Zulfikar, the government does not ensure compliance with such laws or sanction investors who break them, leading to ESG violations.
The energy and mineral resources ministry was approached for comment but did not respond.
However, in August 2025, the secretary of the directorate general of minerals and coal told media that businesses failing to carry out “technical and environmental obligations, including reclamation and post-mining activities” may face administrative sanctions “ranging from written warnings, temporary suspension of activities, to license revocation”.
The cost of ambition
The nickel industry ambitions worry activists and NGOs. They say such development has already come at the expense of local communities, whose needs have been neglected.
According to Zulfikar, there is no public consultation between the government, companies and people when it comes to such projects.
“The lack of public consultancy is a sign that the same (bad) thing will repeat again,” said Zulfikar. “There will be a threat [to] the wellbeing of local people, and environmental damage.”
In a June 2025 statement before Prabowo inaugurated the Dragon project, the non-profit Climate Rights International (CRI) urged the government to “require companies to undertake independent environmental assessments and address any gaps, avoid harmful air and water pollution, and ensure meaningful community consultation”. It said that free, prior and informed consent must be obtained from local Indigenous communities.
Facilities in North Maluku, the province where the Dragon and Titan projects will be establishing key parts of their operations, have been negatively impacting local communities. An October 2025 report by CRI examined the impacts of existing nickel mining and processing projects in the Central and East Halmahera regencies of North Maluku. Central Halmahera is home to a hub of nickel processing called the Indonesia Weda Bay Industrial Park (IWIP). Here CRI has documented various human rights, environmental and climate impacts.
The report found that in the area, “nickel mining and smelting operations are threatening local residents’ right to safe, clean drinking water, as industrial activities and deforestation are polluting the waterways on which local communities depend for their basic needs”.
Julfikar Sangaji, disseminator at the NGO Mining Advocacy Network (Jatam) North Halmahera, said that the environmental conditions of Buli, a coastal town in East Halmahera, have deteriorated due to nearby nickel industry operations. “The river is no longer clean,” he told Dialogue Earth, citing an investigation by national newspaper Kompas showing that the fish and waters of and surrounding Buli Bay is suspected to have been contaminated by heavy metals.
Locals who fight for their land also face threats. In October 2025, 11 people of the Maba Sangaji Indigenous community in East Halmahera were given sentences ranging between two to five months in prison for protesting against nickel mining on their ancestral land.
In the June 2025 statement, CRI’s executive director Brad Adams said the Dragon project “must avoid replicating IWIP’s reliance on captive coal power plants, which have led to major greenhouse gas emissions that undermine the environmental integrity of supposedly green industrial development”.
He added: “A just transition means centring justice, not just technology or investment. We cannot replace one form of harm with another and call it progress.”
Julfikar took a stronger stand. He said harms to local communities seen with the existing facilities in Central and East Halmahera could happen with future projects, so the government should postpone all such projects.
“Who needs all these projects? We don’t. We don’t need the excessive expansion of the nickel industry,” he noted. “This feels like an apocalypse looming over our lives.”
Companies developing the Dragon and Titan projects – Zhejiang Huayou Cobalt, CATL, EVE Energy, Antam, IBC and Daaz Bara Lestari – were contacted for comment but did not respond.
This article was originally published on Dialogue Earth under a Creative Commons licence.
