A consortium led by LG of South Korea has inked out a partnership with Indonesia Battery Corp to build a new battery plant in Indonesia.

This is the first light of detail after the announcement of a Memorandum of Understanding (MoU) containing investments worth USD9.8 billion that was signed between LG Energy Solution Ltd. together with Investment Coordinating Board (BKPM) for developing an integrated battery cell industry.

In the article reported by Reuters, the proposed battery plant has an annual capacity of 10 GWh where its products are being slated for use in Hyundai electric vehicles (EV). The facility estimated to worth USD1.2 billion is being built at Bekasi, with much of the details withheld by Investment Minister Bahlil Lahadalia.

File image of management of LG Chem

The consortium led by LG consists of different LG business units as well as steelmaker Posco and Chinese cobalt company, Huayou Holdings.

In late 2019, Hyundai Motor Company announced their mega-investment totalling USD1.55 billion in Indonesia with the construction of a new automotive production facility in Kota Deltamas, east of Jakarta.

Nickel, together with cobalt and manganese are key materials for the high voltage batteries in electric vehicles (EV) and Indonesia, specifically the islands of Sulawesi and Halmahera, have the largest production and reserves of nickel in the worlds.

The large deposit there has also attracted the eyes of Tesla, where it was reported by the Indonesian government that the American automaker has sent in proposals on plans for a battery manufacturing and supply chain ecosystem.   

As for the electric vehicle, the Ioniq 5 is Hyundai Motor Company’s first dedicated battery EV, equipped with batteries having an energy content of either 58 kWh or 72.6 kWh, priced from GBP37,000 (RM200,000), a significant premium over the smaller Nissan Leaf priced from GBP28,500 (RM154,000) with a 40 kWh battery pack.

There is no news if Hyundai plans to offer the premium-segmented Ioniq 5 in ASEAN region.