Sri Lanka and Indonesia explore EV integration
The Morning: Sri Lanka and Indonesia have been in talks of electric vehicle (EV) value chain integration, given Sri Lanka’s interest in integrating EVs into its public transport system, a statement by the Prime Minister’s office has said.
“Prime Minister Dr. Harini Amarasuriya met with Dewi Gustina Tobing, Indonesia’s Ambassador to Sri Lanka, at the Parliament complex to discuss deepening bilateral ties. The talks centred on trade, tourism, technology, and education, with a strong emphasis on integrating electric vehicles (EVs) into Sri Lanka’s public transport system.”
The statement said that the discussions highlighted Indonesia’s leadership in the global EV market, driven by its vast reserves of nickel, a critical component in EV battery production. Indonesia controls nearly 40% of the world’s nickel supply, positioning it as a key player in the global EV value chain.
The country has attracted billions in investments from global EV giants like Tesla, Hyundai, and BYD, which are setting up manufacturing hubs to leverage Indonesia’s resources and strategic location in Southeast Asia.
Sri Lanka’s interest in integrating EVs into its public transport system presents a lucrative opportunity for Indonesian EV manufacturers, such as PT Hyundai Motor Indonesia and Wuling Motors, which have already captured significant market shares in the region.
Southeast Asia is rapidly emerging as a hub for EV production, with countries like Thailand, Indonesia and Vietnam leading the charge. Thailand has positioned itself as the “Detroit of Asia”, hosting production facilities for major automakers like Toyota, Honda, and Nissan.
Indonesia, on the other hand, is focusing on battery production and raw material processing, aiming to dominate the upstream segment of the EV value chain.
Sri Lanka’s collaboration with Indonesia could facilitate its integration into this regional ecosystem, providing access to cost-effective EV components and technology. Beyond EVs, the discussions explored opportunities in trade, particularly the importation of palm oil and organic liquid fertilisers to support Sri Lanka’s agriculture sector.
Indonesia, the world’s largest producer of palm oil, accounting for over 50% of global supply, is well-positioned to meet Sri Lanka’s demand.
OSL take:
Sri Lanka’s ongoing economic activities and the overall economic expansion have attracted the attention of many foreign countries given that Sri Lanka is also on the path to becoming a hub in the South Asian region. The country’s geographical positioning in the Indian Ocean, many trade agreements and trade concessions enjoyed by Sri Lanka with many foreign countries have also given a boost to Sri Lanka’s image as an emerging business destination in the South Asian region. The increasing confidence in Sri Lanka’s economy given its resilience, strength and growth, is evident by the interest shown by Indonesia to develop an EV value chain integration with Sri Lanka. With Sri Lanka’s manufacturing industry on a strong growth path, the proposed EV integration could result in the provision of cost-effective EV components to meet the growing local and regional demand. Given the interest shown by Indonesia in exploring business/investment opportunities in Sri Lanka, Indonesian businesses/investors could confidently explore the expanding opportunities in the country while also looking at expanding operations through local collaborations. The strong trade ties enjoyed by Sri Lanka with many foreign countries could also add to the business confidence of Indonesian and other foreign businesses to explore opportunities in the country.
| Article Code : | VBS/AT/20250326/Z_2 |