Indonesia opens first EV battery factory

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Indonesia opened its first electric vehicle battery factory on Wednesday, the president said Joko Widodo said, as countries in Southeast Asia try to gain a foothold in this emerging industry.

The country, which is the region’s largest economy and home to the world’s largest nickel reserves, is aiming to position itself as a key player in the global electric vehicle supply chain.

The plant is a joint venture between South Korean manufacturers Hyundai Motor Group and LG Energy Solution (LGES) and can produce up to 10 Gigawatt hours (GWh) of battery cells annually.

According to Widodo, the factory, located in the West Javanese city of Karawang, is “the largest in Southeast Asia”.

The opening marked “a new chapter” that underscored the resource-rich country’s ambition to become a global player in the electric vehicle supply chain, Widodo said at the launch.

“We have a lot of natural resources, but for decades we exported them only in the form of raw materials without added value,” he said.

“But now that smelters are being built and battery cells for electric vehicles are being built, we are becoming a major global player in the global electric vehicle supply chain.”

The plant is part of a $9.8 billion deal for electric vehicle batteries that Indonesia and LG signed in 2020.

The company will produce batteries for Hyundai’s electric vehicles. It is expected that 50,000 units of the Kona Electric SUV will be powered by the battery produced in Indonesia.

The PT HLI Green Power joint venture is expected to invest $2 billion to increase the plant’s capacity to 20 GWh.

Euisun Chung, chairman of Hyundai Motor Group, said Indonesia’s electric vehicle industry would create new economic opportunities.

“This country is the largest automotive market in Southeast Asia. The vehicles produced and sold here are the benchmark for the Southeast Asian region with 700 million potential customers,” he said through an interpreter.

“The mineral resources in this country, such as iron and nickel, are key components of the battery that will power millions of electric vehicles in Indonesia.”

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