Indonesia Promotes NMC Batteries Amid LFP Domination in Electric Vehicles

The government ensures efforts to boost the downstream of nickel into electric vehicle batteries will continue to be carried out.

The commitment was conveyed amid the fierce competition of Lithium Ferro Phosphate (LFP) and NMC-based battery technology, which is a combination of Nickel, Manganese, and Cobalt.

The Minister of Energy and Mineral Resources (ESDM), Arifin Tasrif, explained that the several automotive manufacturers that adopted LFP battery technology for electric cars are quite dominant.

“We indeed have a problem. The downstream lithium (NMC) batteries have not moved. That’s what needs to be developed,” said Arifin at the Directorate General of Oil and Gas Office of the Ministry of ESDM on Friday (16/2).

Arifin explained the potential of the nickel industry in Indonesia in the future is still very potential. Nickel-based batteries will still be needed, with a two-wheeled vehicle population reaching 120 million units and four-wheeled as many as 24 million units.

In addition, each type of electric battery is considered to have its own market.

“What we need to pay attention to is quality, and on the other hand, we need to encourage the industrialization of our mineral natural resources to be able to produce electric batteries,” added Arifin.  

Previously,  Special Staff of the Minister of ESDM for Acceleration of ESDM Sector Industry Development, Agus Tjahjana, revealed that these two types of batteries each have their market.

“(There is a market) for low-end and high-end. Both are profitable. High-end is expensive. Why use LFP, which has a short range and then heavy,” explained Agus at the Ministry of ESDM on Friday (28/1).

Agus revealed low-end electric vehicles will use LFP batteries. Meanwhile, the high-end electric vehicle market will use NMC. His example is Hyundai’s electric vehicle type Ioniq has been confirmed to use NMC batteries.

Meanwhile, the density or energy capacity of these two types of batteries is generally different.  

The density level of LFP is considered lower. Then, if LFP technology wants to increase its capacity, its volume will also increase. This method is considered not suitable to be applied to high-end vehicles.

“Imagine you use an expensive car (but) it’s heavy with batteries, it’s not suitable,” Agus explained.

Agus explained that for expensive or high-end electric vehicles, it is better to use expensive battery technology like NMC because it can save space and is lighter.

Meanwhile, cheap or low-end vehicles and transportation fleets such as trucks or buses can use LFP technology.

In terms of usage age, LFP is considered superior to NMC. One of the factors is the level of absorption or consumption of LFP energy is lower.

Although in terms of price, NMC technology is still more expensive, the trend of price decline is considered to continue to occur.

Agus also emphasized that an international-scale factory with a fairly large investment is needed to build a battery factory.

“The battery factory can’t just be on a national scale, whether it’s LFP or NMC, it has to be international scale. If we limit it to use NMC because we have NMC, people will run away,” said Agus.

Image source: KONTAN / Cheppy A Muchlis