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Ford to acquire EV battery materials plant in $4.5 billion deal

U.S. carmaker Ford has partnered with PT Vale Indonesia and China’s Zhejiang Huayou Cobalt to invest in a $4.5 billion nickel processing plant in Indonesia. This marks Ford’s first investment in Southeast Asia and reflects a growing interest among automakers to secure raw materials for electric vehicle (EV) batteries, which make up about 40% of a vehicle’s sticker price. By investing in the nickel plant, Ford aims to cut costs and catch up to the EV market leader Tesla.

Volkswagen, Europe’s largest automaker, has also announced plans to invest €180 billion ($196 billion) over the next five years in areas such as battery production and raw materials sourcing. Indonesia, which has the world’s largest nickel reserves, has been trying to develop downstream industries for the metal to produce batteries and EVs.

The high-pressure acid leaching (HPAL) plant will be located in Pomalaa in Southeast Sulawesi, where Vale operates a nickel mine. Vale and Huayou began construction of the plant in November, and it is expected to commence commercial operation in 2026. According to Febriany Eddy, CEO of Vale Indonesia, the partnership is unique in bringing a U.S. automaker into an upstream nickel business. Vale holds a 30% stake in the project, while the remaining stake is controlled by Ford and Huayou.

The companies have not disclosed the amount of Ford’s investment in the plant, which is expected to produce 120,000 tonnes per year of mixed hydroxide precipitate, a material extracted from nickel ore for use in EV batteries. Christopher Smith, Ford’s chief government affairs officer, said that the partnership will ensure that the nickel used in the company’s EV batteries is mined and produced within the same environmental, social, and governance (ESG) standards as their global business practices.

Indonesia’s government has banned exports of unprocessed nickel ore since 2020 to guarantee supply for existing and potential investors, while also courting global EV makers like Tesla and China’s BYD Group to invest in the country.

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