(Bloomberg) — BASF SE plans to discontinue a project with Eramet SA to spend as much as $2.6 billion building a nickel-cobalt refinery in Indonesia, reversing an earmarked investment in the Southeast Asian nation as sales growth slows for electric vehicles.
The global availability of battery-quality nickel has improved since the project was conceived, BASF said Monday in a statement. The company no longer sees the necessity for such a substantial investment, it said.
The outlook for electric vehicles has dimmed in the past year, with BloombergNEF slashing its battery-electric sales estimates by 6.7 million vehicles through 2026. The slowdown is particularly marked in Germany, BASF’s home market, and the US. Companies including Volkswagen AG, Stellantis NV and Mercedes-Benz have already pared or shifted battery projects.
The scuttled BASF-Eramet project, known as Sonic Bay, was going to produce about 67,000 tons of nickel and 7,500 tons of cobalt a year, Indonesia’s Investment Ministry said in a statement in January last year.
Indonesia aims to be a global hub for the EV supply chain and is already home to a number of projects — many of them Chinese-backed — to make battery-grade nickel.
China has provided incentives likely totaling in the tens of billions of dollars and can now make far more batteries than it needs, which is driving down prices, according to BNEF.
–With assistance from Christoph Rauwald and Craig Trudell.
(Updates with context in the third paragraph)
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