The Indonesian automotive industry is currently undergoing a major transformation toward a battery-based electric motor vehicle (KBLBB) ecosystem. The government has established a clear policy direction through Presidential Regulation No. 55 of 2019 to accelerate the adoption of electric vehicles [4]. Along with this growth, the implementation of a circular economy has become a crucial pillar for automotive and component manufacturers.

A circular economy offers a more sustainable approach compared to the traditional linear model. By optimizing reuse, repair, and recycling, manufacturers can reduce production costs while significantly lowering their carbon footprint [1]. This transformation is not only beneficial for the environment but also has the potential to contribute up to IDR 593 trillion to Indonesia’s GDP by 2030 [2].

The assembly process of electric motors in a modern manufacturing facility that prioritizes material efficiency and sustainability. — Image created by AI

The importance of resource efficiency in component manufacturing

The production of electric motors and supporting components requires critical materials with highly volatile prices. The use of secondary materials from recycling can reduce dependence on primary mined materials. The Ministry of Industry continues to encourage the implementation of green industry standards to ensure raw material efficiency. This step helps companies reduce production costs by 20-30% through the optimized use of recycled aluminum and steel in chassis production.

In addition to structural materials, power electronic components such as inverters are also a primary focus. Reconditioning IGBT modules and printed circuit boards (PCBs) allows these components to have a longer service life. This strategy aligns with the government’s efforts in developing electric vehicle batteries with high recyclability from the design stage so that industrial waste can be minimized from the outset.

Electric vehicle battery recycling strategies

Batteries are the most valuable yet complex components in electric vehicles. Indonesia Battery Corporation (IBC) is preparing a battery recycling facility to process end-of-life batteries [3]. This facility aims to extract valuable materials such as nickel, cobalt, and lithium for reuse in the production of new cathodes.

The application of hydrometallurgical technology allows for a cleaner extraction process compared to traditional methods. Through cost-benefit analysis of electric vehicle battery recycling in Indonesia, manufacturers can identify potential long-term savings. This also supports the fulfillment of increasingly strict Domestic Component Level (TKDN) targets for the national automotive industry [4].

Optimization of electric motors and permanent magnets

Modern electric motors often use rare-earth magnets such as Neodymium-Iron-Boron (NdFeB). The recycling process for these magnets is very challenging but crucial for maintaining the supply chain. Innovation in separating magnets from rotors without damaging their magnetic properties is now a research focus for many manufacturers.

The use of recycled copper in stator coils also provides a positive impact. Using this material has been proven to cut motor manufacturing carbon footprints by up to 65% compared to using virgin mined copper. Manufacturers that adopt these practices will have a competitive advantage in a global market that is increasingly concerned with ESG (Environmental, Social, and Governance) aspects.

Challenges and future opportunities

Despite the immense potential, there are several challenges that the industry must overcome. Reverse logistics systems to collect used components are not yet integrated nationally. Furthermore, regulations related to hazardous and toxic waste (B3) management require strict compliance from industry players.

The government is optimistic that the circular economy will create up to 4.4 million new green jobs by 2030 [2]. These opportunities span sectors including remanufacturing, recycling centers, and the application of used batteries for Energy Storage Systems. Through collaboration between the government and the private sector, Indonesia can become a sustainable electric vehicle manufacturing hub in the region.

More Information

  1. Circular economy: An economic system that aims to minimize waste and maximize resource use through closed loops such as repair, reuse, and recycling of industrial components.
  2. TKDN (Domestic Component Level): The percentage of local component value contained in a product, which is mandated by the government to encourage the independence of the national automotive industry.
  3. Hydrometallurgy: A process of extracting metals from ore or battery waste using aqueous solutions to dissolve valuable materials, which is more environmentally friendly than high-temperature smelting.
  4. Reverse logistics: The process of collecting, transporting, and processing end-of-life products or components from consumers back to the manufacturer for recycling.
  5. Critical materials: Essential raw materials such as nickel, lithium, and cobalt that carry high supply risks but are vital for the production of electric vehicle batteries.