Volkswagen will partner with miner Vale, Ford, and China's battery minerals producer Zhejiang Huayou Cobalt to build an electric vehicle (EV) battery ecosystem in Indonesia, according to the Southeast Asian country's investment minister.

Automobile manufacturers are courting Indonesia for raw materials used in the production of EV batteries, which account for roughly 40% of a vehicle's sticker price, in order to cut costs and close the gap on EV market leader Tesla.

Volkswagen, Europe's largest automaker, will collaborate with Vale, Ford, Huayou, French miner Eramet, and several Indonesian firms including Merdeka Gold Copper, the parent company of Merdeka Battery, and energy firm Kalla Group, according to Minister Bahlil Lahadalia in a video statement.

According to Bahlil, the partnership would include joint ventures or the supply of raw materials.

Requests for comment were not immediately responded to by Volkswagen, Ford, Eramet, Merdeka Battery, Kalla Group, or Merdeka Gold Copper. PT Vale Indonesia did not respond.

Indonesia, which has the world's largest nickel reserves, has been attempting to develop nickel downstream industries, with the ultimate goal of producing batteries and EVs.

Ford (F.N) announced its first Indonesian investment last month, joining Vale Indonesia and Huayou in a $4.5 billion nickel processing plant in Pomalaa, Southeast Sulawesi, where Vale operates a nickel mine.