In July 2024, then president Joko Widodo stated that Indonesia must "become a global player in the EV supply chain". He was speaking at the inauguration of a Hyundai EV and battery factory in Karawang, West Java, where government officials outlined the country's commitment to strengthening its EV production "ecosystem".

Indonesia, with its reserves of metals used in EVs - such as nickel, copper and bauxite - has taken steps towards this objective. However, concerns remain regarding the nickel industry's impact on local communities. Experts indicate that without significant legal reforms, local populations will continue to face impacts already documented in existing projects.

This is particularly evident in the province of North Maluku, where several key facilities of two major upcoming EV projects are to be located.

One project was inaugurated by current President Prabowo Subianto in June 2025. Known as "Dragon", it aims to establish an EV battery supply chain, ranging from nickel mining to battery manufacturing. Government officials have stated that the US$ 5.9 billion project is the largest of its kind in Southeast Asia.

Dragon is a joint venture between two state-owned companies - Aneka Tambang (Antam) and Indonesian Battery Corporation (IBC) - alongside Chinese battery manufacturer CATL, through its subsidiary CBL.

The consortium plans to develop five sub-projects in the East Halmahera regency of North Maluku, including facilities for nickel mining, extraction and processing, as well as a battery recycling plant. A large-scale EV battery facility will also be established in Karawang, with commercial operations expected to commence in late 2026, according to a local daily.

Another initiative, known as "Titan", involves an integrated EV supply chain operated by Antam, IBC and commodities trading company Daaz Bara Lestari, in partnership with China's Zhejiang Huayou Cobalt and EVE Energy. Titan is projected to produce 30 gigawatt-hours of batteries annually. Its smelting, refining, cathode and extraction facilities are also to be located in North Maluku, as reported by a local daily.

A question of ownership

Projects such as Dragon and Titan indicate developments in Indonesia's EV production, which has progressed slowly to date.

The country has set production targets for 2025 and 2030.

While production has remained limited, EV sales have increased. According to a consultancy, sales rose by 152.5 per cent in the first quarter of 2025 compared with the previous year. The majority of these vehicles were manufactured by Chinese companies.

Some experts state that rising sales and foreign participation raise concerns regarding ownership of production technology. Evvy Kartini, founder of the National Battery Research Institute, questioned the distribution of ownership within the sector. She stated that although Indonesia may become a major producer of electric batteries, ownership largely remains with foreign entities, particularly from China, with production taking place domestically using locally sourced nickel.

She added that the development of a domestic EV industry requires technology transfer between foreign investors and local stakeholders, alongside the expansion of national research capabilities. Government support for domestic researchers is considered necessary to enable the utilisation of raw materials through locally owned technology and to reduce dependency on external investors. She stated that reliance solely on natural resources without technological capability would be disadvantageous.

Evvy also highlighted the need to assess the distribution of benefits arising from investment, particularly in relation to local communities. She noted Indonesia's unemployment challenges, stating that investment in workforce development is required to ensure that the EV battery industry generates employment opportunities. She stated that a gap remains between the population and the industry. Indonesia records one of the highest unemployment rates in Southeast Asia, with youth unemployment reaching 17 per cent as of October 2025.

Zulfikar Rakhmat, director of the China-Indonesia and Middle East and North Africa Desk at the Center of Economic and Law Studies, stated that economic modelling by the centre suggests that if the Dragon project is successful, it could contribute approximately 0.5 per cent to 1 per cent to national gross domestic product. He added that the country could generate between US$3 billion and US$5 billion annually.

However, he noted that achieving these outcomes would require improvements in environmental standards and regulatory enforcement. He emphasised the need for routine audits to ensure compliance, particularly in relation to health and environmental considerations.

Zulfikar further stated that current ESG (environmental, social and governance) regulations are insufficient. Although the mineral and coal mining law mandates environmental and social responsibilities, including land restoration and community development plans, enforcement remains weak. According to him, the government does not consistently ensure compliance or impose sanctions on non-compliant investors, resulting in ESG violations.

The energy and mineral resources ministry was approached for comment but did not respond.

However, in August 2025, the secretary of the directorate general of minerals and coal stated to media that companies failing to meet "technical and environmental obligations, including reclamation and post-mining activities", could face administrative sanctions ranging from written warnings to temporary suspension of operations or licence revocation.

The cost of ambition

Environmental groups and non-governmental organisations have raised concerns regarding the expansion of the nickel industry, stating that such development has occurred at the expense of local communities.

According to Zulfikar, there is limited public consultation between the government, companies and affected communities in relation to these projects. He stated that the absence of such consultation increases the likelihood of repeated negative outcomes, including risks to community wellbeing and environmental degradation.

In a June 2025 statement issued prior to the inauguration of the Dragon project, Climate Rights International (CRI) urged the government to require companies to conduct independent environmental assessments, address identified gaps, prevent harmful air and water pollution, and ensure meaningful community consultation. The organisation also stated that free, prior and informed consent must be obtained from Indigenous communities.

Facilities in North Maluku, where key components of the Dragon and Titan projects are to be established, have had impacts on local populations. An October 2025 report by CRI examined the effects of existing nickel mining and processing operations in Central and East Halmahera. Central Halmahera hosts the Indonesia Weda Bay Industrial Park (IWIP), where CRI documented human rights, environmental and climate-related concerns.

The report found that nickel mining and smelting activities in the area affect access to safe and clean drinking water, as industrial operations and deforestation contribute to water pollution affecting local communities.

Julfikar Sangaji, a disseminator at the Mining Advocacy Network (Jatam) North Halmahera, stated that environmental conditions in Buli, a coastal town in East Halmahera, have changed due to nearby nickel industry activities. He noted that river water quality has declined and referenced an investigation by a local daily indicating that fish and waters around Buli Bay may be contaminated by heavy metals.

Community members opposing mining activities have also faced legal consequences. In October 2025, individuals from the Maba Sangaji Indigenous community in East Halmahera were sentenced to between two and five months' imprisonment for protesting against nickel mining on their ancestral land.

In the June 2025 statement, CRI executive director Brad Adams stated that the Dragon project must avoid replicating IWIP's reliance on captive coal-fired power plants, which contribute to greenhouse gas emissions and affect environmental outcomes.

He further stated that a just transition requires consideration of justice alongside technological and financial factors, warning against replacing one form of harm with another.

Julfikar stated that the impacts observed in existing facilities in Central and East Halmahera could recur in future projects. He stated that the government should consider postponing such developments, adding that the expansion of the nickel industry poses risks to local communities.

Companies involved in the Dragon and Titan projects - including Zhejiang Huayou Cobalt, CATL, EVE Energy, Antam, IBC and Daaz Bara Lestari - were contacted for comment but did not respond.