Toyota Bets $76 Million on Indonesian Battery Production in CATL Partnership

Strategic Expansion into Southeast Asia’s EV Supply Chain

Toyota Motor Manufacturing Indonesia has committed 1.3 trillion rupiah ($76 million or approximately 12 billion yen) to establish local battery cell and module production through a strategic partnership with Contemporary Amperex Technology Co. Limited (CATL), the largest global electric vehicle battery manufacturer. The investment marks a significant step in localizing hybrid vehicle battery production and positions Indonesia as an emerging export hub for automotive electrification components.

The announcement, made on April 20, 2026, establishes a dedicated production line for Toyota within CATL’s Indonesian manufacturing facility in Karawang, West Java. Operations are scheduled to commence in the second half of 2026, with initial output destined for both domestic hybrid electric vehicle assembly and international export markets. This development makes TMMIN the first Toyota subsidiary in Southeast Asia to export batteries beyond regional markets.

From Import Dependence to Local Manufacturing

Currently, TMMIN imports battery cell components and modules for its existing hybrid vehicle lineup, which includes the Kijang Innova Zenix, Veloz, and Yaris Cross models assembled at its Karawang plant. The new collaboration transitions these operations to domestic production, utilizing Indonesian labor and resources to manufacture the critical energy storage components previously sourced from overseas suppliers.

Nandi Julyanto, President Director of TMMIN, explained that the project extends beyond simple assembly operations.

The battery cell and module components that are currently imported will later be produced by Indonesian human resources. This partnership will not only increase investment but also support Toyota’s multipathway initiative towards carbon neutrality by strengthening the local supply chain.

The facility will produce complete battery cells and modules, representing a substantial upgrade from the current battery pack production line that combines imported cells into finished units. This vertical integration aligns with Indonesia’s Domestic Component Level requirements, which mandate increasing local content in manufactured goods.

Historical Foundations of the CATL Alliance

The Indonesian investment builds upon a comprehensive partnership agreement originally established between CATL and Toyota in July 2019. That foundational deal covered battery supply for new energy vehicles, joint development of new battery technologies, quality improvements, and the establishment of battery reuse and recycling systems. The collaboration reflected both companies’ recognition that stable battery supply chains and continued technological advancement are essential for widespread vehicle electrification.

CATL supplies batteries to major automotive manufacturers globally, including Tesla, BMW, and Volkswagen. Toyota, long recognized as a pioneer in hybrid vehicle technology with decades of electrification experience, has pursued a multipathway approach to carbon neutrality that encompasses hybrid electric vehicles, plug in hybrid electric vehicles, battery electric vehicles, fuel cell electric vehicles, and flexible fuel vehicles using bioethanol blends.

Indonesia’s Nickel-Driven Industrial Strategy

The partnership arrives amid Indonesia’s aggressive push to develop a complete electric vehicle supply chain capitalizing on the country’s status as the largest global nickel producer. Indonesia has implemented restrictive export measures on unprocessed nickel ore since 2014, effectively forcing foreign companies to establish processing facilities within the country to access its mineral resources.

Indonesia aims to produce batteries with a total capacity of 140 gigawatt hours annually by 2030, a target comparable to total global EV battery production in 2020. The government requires foreign battery manufacturers to partner with Indonesia Battery Corporation, a holding company established in 2021 comprising four state owned enterprises: mining industry holding company MIND ID, nickel miner Aneka Tambang, electric utility PLN, and oil and gas company Pertamina.

CATL’s involvement in Indonesia extends far beyond the Toyota partnership. Through its subsidiary Contemporary Brunp Lygend, CATL is implementing a $6 billion Indonesia Battery Integration Project spanning over 2,000 hectares. This initiative covers the entire battery value chain, from nickel mining and processing in North Maluku to battery manufacturing in Karawang and recycling operations. The project includes partnerships with Antam and IBC, and represents the largest battery industry investment in Southeast Asia.

Bioethanol and Diversified Energy Solutions

Alongside the battery initiative, Toyota is advancing alternative fuel strategies in Indonesia through a separate joint venture with Pertamina NRE, the renewable energy subsidiary of state owned energy giant Pertamina. The companies plan to construct a bioethanol production facility in Lampung province with an estimated investment between $200 million and $300 million.

Groundbreaking for the bioethanol plant is scheduled for the fourth quarter of 2026, with production targeted for 2028. This timeline aligns with Indonesia’s plans to implement 10 percent ethanol content in gasoline sold nationwide. Deputy Investment Minister Todotua Pasaribu confirmed that investors in this project will receive tax holidays as part of government incentives to promote renewable energy infrastructure.

Market Dynamics and Production Targets

Indonesia’s electrified vehicle market has demonstrated rapid expansion, with sales reaching 177,367 units in 2025, representing a 71 percent increase from the previous year’s 103,452 units, according to data from GAIKINDO, the Indonesian Automotive Industry Association. Production of electrified vehicles totaled 127,420 units during the same period, with 99,162 units directed to the domestic market.

Hybrid electric vehicles dominate this landscape, accounting for 97,462 units produced in 2025, or approximately 76.5 percent of Indonesia’s total electrified vehicle output. This market composition explains Toyota’s emphasis on hybrid battery production rather than focusing exclusively on fully electric vehicle batteries. Local manufacturing currently accounts for approximately 55 percent of overall electrified vehicle sales in the country.

TMMIN operates as a joint venture between Toyota Motor Corporation and Indonesia’s Astra International, one of the largest domestic conglomerates. This local partnership structure has enabled Toyota to maintain continuous operations in Indonesia for 55 years, during which the company claims to have invested a cumulative Rp 100 trillion ($5.8 billion) across its various manufacturing and distribution activities.

Economic Impact and Export Ambitions

The battery production initiative is expected to generate significant economic benefits beyond the immediate investment. While the $76 million Toyota investment represents a specific production line within CATL’s broader facility, the overall Indonesia Battery Integration Project is anticipated to create 8,000 direct jobs and 35,000 indirect employment opportunities once fully operational.

President Prabowo Subianto has actively promoted these developments, attending the groundbreaking ceremony for the larger CATL project and declaring that Indonesia seeks partnerships with global stakeholders to develop a green battery industry ecosystem. During a recent state visit to Tokyo, the President emphasized that Indonesia will continue opening its economy to Japanese participation, with Japanese direct investments in Indonesia reaching approximately $3.1 billion throughout 2025.

This project, the largest initiative of its kind in Southeast Asia, clearly demonstrates Indonesia’s dedication to promoting sustainable energy.

The export component of TMMIN’s battery production marks a strategic shift in Indonesia’s automotive industry. Rather than serving solely as an assembly hub for domestic consumption and regional distribution, the country is positioning itself as a manufacturing center for sophisticated automotive components destined for global markets. Battery exports are scheduled to begin in the second half of 2026, though specific destination markets have not been disclosed.

Technical and Environmental Considerations

The CATL facility in Karawang will utilize the company’s Lighthouse Factory and Extreme Manufacturing methodologies to ensure efficient production of high quality battery cells and modules. The plant is designed to achieve ultra low energy consumption through renewable energy integration and advanced manufacturing processes. Metal recovery rates for battery recycling operations are projected to exceed 95 percent, supporting circular economy principles.

Once fully operational, the broader Indonesia Battery Integration Project is expected to produce 142,000 tons of nickel and 30,000 tons of cathode materials annually, alongside processing capacity for approximately 20,000 tons of recycled batteries. These outputs will support not only Toyota’s hybrid vehicle production but also the expanding global demand for electric vehicle components.

Environmental and governance concerns remain relevant to Indonesia’s nickel industry, particularly regarding mining practices in Sulawesi and North Maluku where extraction occurs. The World Bank ranks Indonesia 73rd among 190 economies in its Ease of Doing Business index, reflecting ongoing challenges in the business environment despite government efforts to attract foreign investment through partnerships with state owned enterprises.

The Bottom Line

• Toyota Motor Manufacturing Indonesia is investing Rp 1.3 trillion ($76 million) to establish battery cell and module production with CATL in Karawang, West Java, with operations starting in the second half of 2026.
• The dedicated production line within CATL’s facility will make TMMIN the first Toyota subsidiary in Southeast Asia to export batteries to international markets.
• The partnership transitions TMMIN from importing battery components to producing them locally, supporting Indonesia’s domestic content requirements and technical workforce development.
• CATL is simultaneously implementing a separate $6 billion Indonesia Battery Integration Project covering the complete battery value chain from nickel mining to recycling.
• Toyota is also developing a $200-300 million bioethanol plant with Pertamina NRE in Lampung province, targeting production by 2028 to support the country’s ethanol blending mandates.
• Hybrid electric vehicles currently represent 76.5 percent of Indonesia’s electrified vehicle production, explaining the strategic focus on hybrid battery technology over pure electric alternatives.
• The initiative aligns with Indonesia’s goal to produce 140 GWh of battery capacity annually by 2030 and achieve carbon neutrality by 2060.
• TMMIN operates as a joint venture between Toyota Motor Corporation and Indonesia’s Astra International, with cumulative investments of $5.8 billion over 55 years of operation in the country.