South Korea’s Hyundai Motor Group and LG Energy Solution officially launched the first-ever electric vehicle battery cell factory in Indonesia on July 3, 2024.
South Korean players pioneer battery cell production in Indonesia
According to the press release, Hyundai and LGES inaugurated the first battery cell factory in Karawang, West Java province, on Wednesday through their joint venture – HLI Green Power.
The HLI Green Power plant will have an annual production capacity of 10 GWh of battery cells. Therefore, it can crank out enough battery cells to support the production of more than 150,000 competitively priced Hyundai and Kia electric vehicles, starting with the new Kona Electric. Hyundai also announced plans to start mass production of its new Kona Electric in Indonesia, following the Hyundai IONIQ 5.
Hyundai expects its localized production strategy to “foster the Kona Electric as Indonesia’s representative electric vehicle.”
LGES-Hyundai Motor joint venture
In hindsight, Hyundai partnered with LGES to establish a new battery cell factory for electric vehicles near Indonesia’s capital in March 2021.
The two parties put $1.1 billion on the table for a 50/50 stake in the joint venture.
Hyundai expects the HLI Green Power to enable a “steady supply of EV batteries at a competitive price for upcoming BEVs.”
As per the report, the new Indonesian battery cell facility has already been producing battery cells since the second quarter of the year after completing trial production in H2 2023.
“The completion of the Indonesian battery cell plant and the mass production of the Kona Electric are the fruits of collaboration between Hyundai Motor Group and Indonesia, symbolizing our strong partnership and signifying that we are creating the future of the electric vehicle ecosystem together, not only in Asia but also around the world.”
Hyundai Motor Group Chairman Chung Eui-sun
Indonesia’s potential for EV growth
Indonesia has a strong potential to advance as a dominant force in the global electric vehicle and battery industry.
It currently has the world’s largest nickel reserve, a crucial material for electric vehicle battery production. In addition, it is the fourth most populated nation worldwide.
The Indonesian government has set a target of producing 600,000 electric vehicles per year by 2026, demonstrating its commitment to achieving carbon neutrality.
“Today, we have laid the foundation for playing a significant role in the global electric vehicle battery and electric vehicle ecosystem. I would like to express my gratitude to Hyundai Motor Group and Chairman Chung Eui-sun for deciding on this important project. The integrated battery ecosystem between Hyundai Motor Group and LG will further strengthen the relationship between Korea and Indonesia.”
Indonesian President Joko Widodo
As of today, EVs only account for approximately 2% of the country’s overall automotive industry. However, experts project EV shares to increase to double-digit by the end of the decade.
Hyundai’s EV production in Indonesia is a crucial part of its preparation for the looming intensified competition from low-cost Chinese players like BYD.
Last week, Hyundai debuted its new low-cost Inster EV for Europe, starting at only under $27,000 (25,000 euros). Meanwhile, the new $30,700 (KRW 42.08 million) Kia EV3 has already accumulated 10,000+ reservations in just weeks since launch.
All that said, the new battery cell production in Indonesia will further boost Hyundai’s competitiveness in the EV market. It will enable it to cut battery costs, making its offerings more affordable for global customers.
