By Fransiska Nangoy and Stefanno Sulaiman
JAKARTA (Reuters) – South Korea’s Hyundai Motor Group and LG Energy Solution (LGES) on Wednesday opened Indonesia’s first electric vehicle battery cell production plant, with an annual capacity of 10 gigawatt-hours (GWh) of battery cells.
The plant is part of a commitment by Hyundai Motor and LGES to invest up to $9.8 billion in Southeast Asia’s largest economy to develop an electric vehicle supply chain, the Indonesian government said, seeking to capitalize on its rich resources of nickel and copper.
“This country’s mineral resources such as iron and nickel are key components of the batteries that will power millions of electric vehicles worldwide,” said Euisun Chung, executive chairman of Hyundai Motor Group, at the plant’s opening ceremony.
The plant is integrated with Hyundai’s car factory, where the company will produce 50,000 units of the Kona Electric annually, an SUV that uses batteries produced in Indonesia.
Hyundai and LGES are also preparing to develop the second phase of the battery factory, which will involve an investment of $2 billion to expand the factory’s capacity by 20 GWh.
The companies announced in 2021 that they were investing $1.1 billion in the battery cell factory in West Java province, which has enough annual capacity to produce batteries that can power more than 150,000 battery-powered electric vehicles.
President Joko “Jokowi” Widodo said the plant would strengthen Indonesia’s key position in the global electric vehicle supply chain by establishing a domestic processing industry.
“This is the first and largest battery cell factory for electric vehicles in Southeast Asia. I am sure we can win this competition with other countries because nickel, bauxite and copper are available here,” Jokowi said at the same event.
Indonesia, the world’s largest nickel producer, banned exports of raw nickel in 2020 to boost investment in domestic processing of the metal.
Indonesian Investment Minister Bahlil Lahadalia and South Korean Trade Minister Cheong Inkyo also met on Wednesday to discuss cooperation in electric vehicles, petrochemicals and clean energy technologies such as carbon capture and storage, the South Korean Trade Ministry said in a statement.
(Reporting by Fransiska Nangoy, Stefanno Sulaiman in Jakarta; additional reporting by Joyce Lee in Seoul; Editing by Devjyot Ghoshal and Miral Fahmy)
