Shares of Ford Motor Co. (NYSE: F) surges in pre trading session on Thursday as a new partner in a $4.5 billion nickel processing plant in Indonesia, Ford Motor Co. (NYSE: F) has joined PT Vale Indonesia and China’s Zhejiang Huayou Cobalt.
The investment, which marks Ford’s first in Southeast Asia, highlights the growing demand among automakers for the raw materials needed to make the batteries for electric vehicles (EVs), which make up about 40% of a car’s sticker price. Automakers are pursuing this demand in an effort to reduce costs and catch up to Tesla, the market leader in EVs.
The largest manufacturer in Europe, Volkswagen, said last month that it will invest 180 billion euros ($196 billion) over five years in sectors including battery manufacturing and raw material procurement.
Indonesia, which possesses the world’s highest nickel deposits, has been striving to build downstream sectors for the metal, ultimately intending to make batteries and electric cars.
At Pomalaa, Southeast Sulawesi, where Vale runs a nickel mine, a high-pressure acid leaching (HPAL) plant is being considered. The plant’s development was started by Vale and Huayou in November, and commercial operation is anticipated to begin in 2026.
The U.S. carmaker entering an upstream nickel company makes the acquisition special, according to Febriany Eddy, CEO of Vale Indonesia. She said that Ford and Huayou own the remaining 70% of the project, with Vale owning 30% of it.
Ford’s investment in the facility, which is anticipated to generate 120,000 tonnes of mixed hydroxide precipitate, a substance derived from nickel ore for use in EV batteries, was not disclosed by the businesses.
Ford’s chief government affairs officer, Christopher Smith, said at the signing ceremony that the automaker “can help guarantee that the nickel that we use in electric car batteries is mined, manufactured under the same ESG standards as part of our business across the world.”
To assure supply for current and future investors, Indonesia’s government has prohibited the export of unprocessed nickel ore since 2020. At the same time, the government is actively courting foreign EV manufacturers like Tesla and China’s BYD Group to invest in Indonesia.
