Ford invests to make the batteries production for electric vehicles cheaper
Ford has invested in a nickel recycling facility. It will recycle raw materials for the batteries used in electric cars. The plant in Indonesia has received US$4.5 billion in total from the US corporation and companies from Indonesia and China.
For Ford, this was its first investment in Southeast Asia. The American manufacturer’s desire to increase its investment in an essential automotive industry dictated the move. Manufacturers of batteries for electric cars use nickel, which in turn account for about 40% of the total cost of a vehicle.
Indonesia has the largest nickel reserves in the world, making it a country of extreme interest to the automotive industry. Global market trends show that all the major vehicle manufacturers are increasing their investment in electric vehicles. Ford is no exception. However, the challenge in increasing the production of zero-emission vehicles is the high cost of production. Manufacturers are therefore supporting nickel recycling facilities to reduce the batteries’ cost. A prime example is Volkswagen Europe, which plans to invest €180bn in the battery and battery raw materials sectors over the next five years.
The Indonesian nickel processing plant
The local company Vale and the Chinese business Huayou invested in the Indonesian nickel processing plant. Construction of the facility started in November 2022 in Pomalaa, where Vale operates several nickel mines. The project involves the erection of a plant that will process the feedstock using a high-pressure acid-leaching process. Experts expect that full-scale operation of the plant commence in 2026.
According to Vale, Ford’s entry into the project will be the automotive company’s first experience in nickel mining and processing. The Indonesian company has a 30% stake in the plant, with the remainder held by the American manufacturer and Huayou.
Under the project, the plant will produce about 120 thousand tons of hydroxide sludge annually. Industrialists use this raw material to make batteries and extract it from nickel ore.
It should be noted that for Indonesia, nickel mining is one of the strategically important industries. In 2020, the Indonesian government banned ore export to boost investment in the local market. At the same time, the Indonesian authorities are encouraging global car manufacturers to invest in the processing of raw materials. In addition to Ford, the US company Tesla and Chinese carmaker BYD have already invested in local nickel production.