Hyundai and LG Energy Solution launch Indonesia’s first EV battery cell plant

By Editor


Hyundai Motor and LG Energy Solution (LGES) have opened Indonesia’s first battery cell production plant for electric vehicles (EV). This facility boasts an annual capacity of 10 Gigawatt hours (GWh) of battery cells.

EV market

Indonesia is becoming a major EV market.

Indonesia’s sales of battery electric cars surged nearly 70 percent in 2023 to 17,051 vehicles from 10,327 in 2022, according to data by the Association of Indonesia Automotive Industries. The number of hybrid cars in Indonesia increased 5.2 times to 54,000 units in 2023.

Recently, China’s BYD said it will build a $1 billion factory in West Java province to tap the EV market.

In August 2022, China’s Wuling Motors began operating an assembly line for its Air EV model in Cikarang, West Java.

Rachmat Kaimuddin, Indonesian Deputy Minister of Transportation and Infrastructure, in a column in China Daily, wrote: “Under the new incentives packages, international automakers that produce EVs in Indonesia, south-east Asia’s largest automotive industry, are eligible to get import duty exemption on completely built-up four-wheeler EVs and completely knocked-down four-wheelers EVs with local component requirement below 40 percent until 2025.

“This will provide international manufacturers greater access to Indonesia’s lucrative automotive market which saw the production of 1.4 million cars — with 41 percent of those for exports — and the sales of 6 million motorcycles in 2023,” Rachmat Kaimuddin said.

Hyundai and LG Energy

Hyundai Motor and LG Energy Solution plan to invest up to $9.8 billion in Southeast Asia’s largest economy. Their goal is to develop a comprehensive EV supply chain, capitalizing on Indonesia’s abundant nickel and copper resources, according to statements from the Indonesian government.

“Mineral resources of this nation, such as iron and nickel, are crucial components in batteries that will power millions of EVs globally,” said Hyundai Motor Group Executive Chair Euisun Chung during the factory’s opening ceremony.

The plant is integrated with Hyundai’s auto manufacturing facility, which is set to produce 50,000 units annually of the Kona Electric, an SUV that will utilize batteries made in Indonesia.

Hyundai and LGES are preparing to develop the second phase of the battery plant, which includes an additional $2 billion investment to expand the plant’s capacity by 20 GWh, Reuters news report said.

Initially announced in 2021, the companies committed $1.1 billion to establish the battery cell plant in West Java province. This facility can produce enough batteries annually to power over 150,000 battery-based electric vehicles.

Indonesia, the world’s leading producer of nickel, banned raw nickel exports in 2020 to promote investment in domestic processing of the metal.

Baburajan Kizhakedath

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