Stellantis to Partner with Vale and Huayou Cobalt for Nickel Production in Indonesia

Stellantis, the world’s third-largest automaker, is entering discussions with Brazil’s Vale and China’s Huayou Cobalt to invest in a nickel production unit in Indonesia. Vale has announced plans to build three nickel production plants in the country, one in collaboration with Ford and another with Stellantis. This initiative aims to secure a stable supply of nickel, a crucial component for electric vehicle (EV) batteries.

The plant will utilize a high-pressure acid leaching process to convert low-grade ore into high-quality nickel. Huayou Cobalt will hold a stake in the project along with Stellantis and Vale. The Indonesian government is actively supporting the automaker to finalize the agreement.

Indonesia aims to diversify its economic partnerships and reduce reliance on China by boosting business with Western countries. For Stellantis, this agreement complements its investments in lithium mines, another essential metal for EV batteries. The company has allocated a budget of €50 billion for the electrification of its vehicle lineup over the next decade.

This project highlights Stellantis' focus on securing raw materials, even if it means not complying with the U.S. Inflation Reduction Act (IRA), which provides tax credits for EVs sourced from countries with a free trade agreement with the USA. Since Indonesia lacks such an agreement, the nickel from this project would not qualify for IRA's tax credits.

In a parallel move, Vale and Huayou are also investing $4.5 billion in a similar nickel production facility in collaboration with Ford.