Toyota and CATL are building a battery hub in Indonesia to cut import dependency
Toyota's hybrid bet just got a manufacturing backbone. Toyota Motor Manufacturing Indonesia (TMMIN) has signed a major partnership with CATL — the world's largest battery maker — to produce hybrid vehicle batteries locally in Karawang, West Java. The deal is worth around Rp1.3 trillion ($76 million), and it targets exports starting in the second half of 2026. For a market where hybrid demand is accelerating fast, the timing is deliberate.
The local content leap
Right now, TMMIN assembles battery packs in Karawang for models like the Kijang Innova Zenix HEV and Yaris Cross HEV — but the cells inside those packs are imported. That means local content sits at just 8%. Under the new arrangement with CATL, Toyota aims to push that figure to 80% by the end of 2026, shifting from assembly-only to full cell and module production. CATL already operates a 6.9 GWh facility at Karawang as part of its broader Indonesia Battery Integration Project, and Toyota's dedicated line will sit within that framework, per CarNewsChina.
Why Indonesia, why now
Indonesia is not a random pick. The country holds some of the world's largest nickel reserves — a key battery ingredient — and has been aggressively courting manufacturers to move up the value chain from raw ore to finished components. Hybrid vehicle sales in Indonesia surged 71% in 2025 to 177,367 units, with hybrids accounting for more than three-quarters of the country's electrified vehicle output, according to Investortrust. That growth gives the factory an immediate domestic market while it scales up for exports.
TMMIN will become the first Toyota subsidiary in Southeast Asia to export batteries, shipping both finished packs and standalone components. The flexibility matters: different markets at different stages of EV infrastructure buildout want different things.
The bigger picture
This move fits Toyota's wider "multi-pathway" strategy — developing hybrids, battery EVs, hydrogen, and synthetic fuels in parallel rather than committing exclusively to one technology. While Ford and other Western automakers pulled back EV production in 2024–2025 as US demand softened, hybrid demand in Southeast Asia kept climbing. Toyota is effectively building supply chain resilience in a region where charging infrastructure remains patchy and hybrids are the practical choice for millions of buyers.
The partnership also deepens the auto industry's reliance on CATL. The Chinese battery giant is simultaneously building facilities in Spain (a $4.3 billion joint venture with Stellantis, announced late 2025) and Hungary, encircling Western markets. For US and UK regulators already scrutinizing Chinese battery supply chains under trade and security frameworks, Indonesia adds another node to a network that is growing faster than any Western alternative.
