Indonesia’s nickel: Aimed at EVs, but still parked in stainless steel

The nation’s battery-grade production surges to catch on the EV race, even as global demand pivots toward nickel-free alternatives

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Key findings

Branded as an EV-driven boom, 83% of Indonesia’s 2025 nickel production was absorbed by the stainless steel sector, according to publicly available industry data. Only 17% currently goes into the Electric Vehicle (EV) battery supply chain, revealing a significant mismatch between the country’s ‘green nickel’ marketing and actual market demand.
Internal combustion engine (ICE) vehicles still form the majority of global sales, meaning a large share of nickel—used in stainless steel vehicle components—will continue to be tied to the ICE vehicle market, further off-roading Indonesia’s ‘green nickel’ narrative.
Meanwhile, Indonesia’s nickel downstreaming strategy faces a major threat as nickel-free batteries gain traction globally, with LFP (Lithium Iron Phosphate) batteries in particular commanding over 80% of the Chinese market due to lower costs and longer lifespans.
The market in fact faces a ‘dirty nickel’ paradox due to reliance on captive coal power, thanks to regulatory loopholes and green taxonomy classifying such plants as ‘transitional’.
This carbon lock-in is made worse by a lack of anticipatory planning or mechanisms to ensure new industrial sites are located near renewable energy potential or designed for future grid connectivity.
Globally, Indonesian nickel risks being locked out of premium Western markets with stricter emissions policies, and is vulnerable to disruptions to fossil fuel and essential materials imports, like the Hormuz Strait crisis.
To future-proof Indonesia’s nickel industry and realize the Golden Indonesia 2045 vision, the nation must pivot from a volume-driven model to a high-value, low-emission ecosystem. By addressing rapid ore depletion and decoupling growth from captive coal, Indonesia can transform ‘green nickel’ from a mere label into a financially and operationally incentivised reality.