Hyundai Motor Group said on Thursday it will partner with LG Energy Solution to build an electric vehicle battery factory in Indonesia to secure a stable supply of battery cells for its EVs.
The two South Korean companies signed a memorandum of understanding with the Indonesian government to establish a joint venture to manufacture battery cells.
Under the agreement, Hyundai and LG Energy will invest a total of $1.1 billion to build a battery cell plant in Karawang, just east of Jakarta, with both companies holding 50% ownership. The Indonesian government has agreed to offer incentives and rewards to support the plant.
Hyundai said construction of the Indonesian plant is scheduled to start in the fourth quarter and will be completed by the first half of 2023. Mass production of battery cells at the new facility is expected to commence in the first half of 2024.
The proposed Karawang plant is described by the companies as the "most optimal location" for each. Indonesia is one of the world's largest producers of nickel, a key raw material for EV batteries.
The Indonesian government has been aggressively fostering an EV industry ecosystem in hopes of playing a pivotal role in the global EV race -- including through the establishment of Indonesia Battery Corp. earlier this year.
The new battery cell factory in Karawang, close to the Indonesian capital of Jakarta, will be constructed on a 330,000-sq.-meter plot of land. When fully operational, it is expected to produce 10 GWh worth of lithium-ion battery cells annually, or enough for more than 150,000 EV batteries.
Source: Nikkei Asia
Author: Kim Jaewon
Original published date: 29 July, 2021
August 02, 2021
