Indonesia and Australia plan to work together to develop electric vehicle and battery supply chains. This collaboration is important as both countries have significant nickel and lithium resources. The partnership also helps Australia diversify its supply chain and reduce reliance on China. Indonesia is trying to attract foreign investment to build its EV industry, but is facing opposition from the US because of the Inflation Reduction Act. The question is whether this partnership can address the climate challenge in a way that is good for both countries. China currently dominates the global supply chains for EVs and batteries, and has significant investments in both Indonesia and Australia. Chinese companies are working to secure critical resources and foreign markets, which could make it difficult for the Indonesia-Australia alliance to compete. Furthermore, China’s capacity to absorb large supplies of critical minerals is unmatched. There are also environmental and human rights concerns in Indonesia’s nickel industry that need to be improved. The alliance must focus on building a cooperative ecosystem that includes all leading technology nations, including China. This larger, more diverse ecosystem will enhance supply chain resilience and help address the climate challenge.
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