Indonesia Is Subsidising the Chemistry It Can Supply

Jakarta’s proposed EV incentives would favour nickel-based NMC packs — the chemistry LFP has been displacing worldwide.

The read. Indonesia mined an estimated 60–65% of the world’s nickel in 2025, and its proposed EV package — VAT relief of 40–100% on electric cars and a Rp5m (US$280) subsidy per electric motorcycle, targeting 100,000 of each — is being shaped around nickel-based NMC batteries. But the global market is moving the other way: LFP, which uses no nickel, passed 55% of EV batteries deployed in 2025, up from nearly 50% a year earlier. Energy Minister Bahlil Lahadalia was explicit that LFP is not a priority because its raw materials are not domestic.

What to watch. This is industrial policy bending demand toward the resource Indonesia holds, not the chemistry the market is choosing — so eligibility, not price, may decide what sells there. For manufacturers, the practical step is to keep an NMC variant in the plan for the Indonesian market even where LFP is the global default, and to watch whether the incentive structure is finalised as drafted.