The joint factory, set for completion in the first half of 2023, will be built on a 300,000-meter site in Karawang, near the Indonesian capital of Jakarta. The two South Korean firms have formed a $1.1 billion joint venture for the project, with each owning a 50 percent stake.
The new facility is to produce NCMA (nickel, cobalt, manganese and aluminum) lithium-ion batteries starting in the first half of 2024, enough to power more than 150,000 electric vehicles. Depending on future demand, the facility will consider expanding its capacity to as much as 30 gigawatt-hours per year.
Battery cells produced in Karawang will be used in Hyundai Motor and Kia’s EV models built upon Hyundai Motor Group’s dedicated EV platform, E-GMP.
“Starting with this plant, an EV ecosystem will be successfully established in Indonesia with the development of various related industries. Furthermore, we expect Indonesia to play a key role in the ASEAN EV market,” Hyundai Motor Group Chairman Chung Euisun said.
The groundbreaking ceremony was held at the project site and attended by Indonesia’s President Joko Widodo, Investment Minister Bahlil Lahadalia and Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan.
Joining from Seoul via virtual link were Hyundai Motor chief Chung, LG Energy Solution CEO Kim Jong-hyun and Hyundai Mobis CEO Cho Sung-hwan.
The Hyundai Motor-LGES tie-up comes as global carmakers rush to set up joint ventures with battery makers to secure a stable supply of battery cells, without which no EV models can run.
LGES, the world’s largest supplier of EV batteries, has formed a similar partnership with General Motors in the US, while its hometown rival SK Innovation has teamed up with Ford on joint battery cell production.
The Indonesian government has pledged to provide various incentives and rewards for building the plant there, including waiving corporate taxes and tariffs on related parts and equipment.
By Kim Byung-wook (firstname.lastname@example.org)