Indonesia's first production plant for battery cells for electric vehicles was officially launched on Wednesday by South Korean carmaker Hyundai Motor Group and battery manufacturer LG Energy Solution as the Southeast Asian country looks to take advantage of its raw material supply to move up the EV value chain.
Hyundai Motor Group partnered in 2021 with LG Energy Solution to build an EV battery cell plant in Karawang, near the Indonesian capital Jakarta. The companies invested $1.1 billion in the plant and each owns a 50% stake in the joint venture. The factory will have an annual capacity of 10 gigawatt hours (GWh) worth of battery cells, enough for over 150,000 battery electric vehicles.
According to Hyundai's plans, the battery cell JV will help Hyundai and Kia secure a stable supply of EV batteries at a competitive price for upcoming battery electric vehicles (BEVs).
The EV battery plant is integrated with Hyundai's car manufacturing plant, where it expects to begin production of 50,000 units per year of Kona Electric, an SUV that would use Indonesian-made batteries.
"Mineral resources of this nation, such as iron and nickel are important components in batteries that will mobilize millions of EVs globally," Hyundai Motor Group executive chair Euisun Chung said at the opening ceremony, commenting on Indonesia's
Indonesia, the largest economy in the Southeast Asian bloc, looks to develop its EV production capabilities as demand grows. The government hopes to be producing 13 million electric motorcycles and 2.2 million electric cars by the end of the decade.
Indonesia has a well-established metals and minerals industry, with huge nickel reserves. Nickel is a vital component of EV battery production and sourcing it locally can help cut manufacturing costs.
Indonesia, the world's biggest nickel miner, has been looking to develop nickel processing industries and ultimately produce batteries for EV manufacturers and is eager to attract foreign companies for those ventures.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More