China battery export controls add challenge to Indonesia’s downstream ambitions
Friday, June 5 2026 - 07:17 AM WIB
By Dominikus
China's recent export controls on lithium battery materials and manufacturing equipment could pose new challenges for Indonesia's efforts to build a broader battery supply chain, as the country remains closely tied to Chinese technology and processing capacity, Septian Hario Seto, Executive Secretary of Indonesia's National Economic Council, said at a journalism training event held alongside the Indonesia Critical Minerals Conference in Jakarta on June 3.
A presentation shown during the event said China dominates technology and processing capacity across much of the global battery supply chain, including electrolyte solvents, electrolyte salts, anode materials, precursors, cathode materials, electrolytes and separators.
The issue has gained importance following China's implementation of export controls on certain lithium battery-related items and synthetic graphite anode materials under MOFCOM Announcement No. 58 of 2025, according to the presentation.
Items covered by the controls include lithium-ion battery manufacturing equipment, production technology, cathode materials and graphite anode materials. The presentation also listed LFP cathode materials, precursor-related products, lithium-rich manganese-based cathode materials, synthetic graphite anode materials, granulation equipment, graphite-processing equipment, coating modification technology and related production technology among the controlled items.
The measures could complicate the next phase of Indonesia's downstream industrialisation strategy as the country seeks to move beyond mining and smelting into higher-value battery materials, components and electric vehicle manufacturing.
Indonesia has already developed several segments of the lithium battery supply chain, including mixed hydroxide precipitate (MHP), precursors, cathode materials, anode materials, copper foil, aluminium foil, electrolytes, separators, battery components and battery manufacturing, the presentation showed.
It added that Indonesia is emerging as one of the three largest producers of battery materials and components outside China, with annual production capacities of 160,000 metric tons of anode materials, 120,000 tons of cathode materials and 100,000 tons of precursors.
Read also : Chinese firms projected to control 39% of global lithium extraction by 2030
However, China remains central to Indonesia's critical minerals industrialisation drive. According to the presentation, Chinese companies control around 75% of Indonesia's nickel refining capacity, supported by high-pressure acid leach (HPAL) technology, roughly US$30 billion in Chinese investment and the development of more than 60 smelters, up from just two in 2016.
The presentation cited several major China-linked investments in Indonesia's battery and electric vehicle ecosystem, including CATL's US$6 billion battery project, BYD's US$1 billion EV manufacturing plant and LONGi's 1.6-gigawatt solar panel factory.
As a result, Indonesia's challenge extends beyond attracting investment to securing access to technology, equipment and markets as global battery supply chains become increasingly shaped by geopolitical competition.
The presentation outlined two possible strategic paths. One is deeper integration with Chinese supply chains, leveraging Chinese capital and technology to accelerate domestic industrialisation. The other is closer alignment with alternative technology and market networks led by the United States and its partners.
Indonesia's position is complicated by the fact that Europe and the United States remain among the largest markets for nickel-based batteries, while China dominates technology, processing capacity and investment across key segments of the battery value chain.
The presentation described this as part of a broader geoeconomic dilemma in which countries must balance economic interdependence, economic security and geopolitical competition.
For Indonesia, China's battery export controls could increase the urgency of developing domestic technological capabilities, diversifying partnerships and strengthening human resources in battery materials and processing technology.
Without greater technological self-reliance and more diversified supply-chain linkages, Indonesia's ambitions to become a major battery manufacturing hub could remain vulnerable to external restrictions on equipment, production technology and key battery materials.
Editing by Reiner Simanjuntak