Electric Vehicle Strategy in Indonesia and The Difficulties of Structural Transformation: Green Industry or Green Dependence?

Abstract

This study examines Indonesia’s electric vehicle (EV) strategy through nickel downstreaming and evaluates whether this policy has generated green and autonomous structural transformation. Using a qualitative case study approach, the research analyzes policy documents, government and international institutional reports, academic studies, and industry documents covering the period 2014–2026. The findings show that state intervention has successfully shifted Indonesia’s position from a raw nickel exporter toward a major hub for nickel processing, battery materials, and EV-related production. However, the expansion of physical production capacity has not been matched by equivalent growth in domestic technological capabilities, industrial linkages, labor absorption, and decarbonization. Downstreaming has also increased capital intensity and dependence on foreign capital, technology, markets, and industrial networks. Moreover, the dominance of coal-based captive power creates a contradiction between EV production and green industrialization. The study concludes that Indonesia is still building, rather than consolidating, green industrialization. To achieve greater developmental autonomy, future policy should prioritize technology transfer, domestic supplier development, research and development, workforce upgrading, partner diversification, and low-carbon energy.