Hyundai Motor Group has teamed up with battery producer LG Energy Solution to establish a joint venture in Indonesia to manufacture battery cells for electric vehicles (EV).

The two companies, together with the Government of Indonesia have signed a Memorandum of Understanding (MoU) for the 10 GWh battery factory to be built in Karawang, Indonesia. The mega project is said to be worth a total of USD1.1 billion (RM4.64 billion).  

Construction is scheduled to begin by the end of this year and will be completed by the first half of 2023, with mass production of batteries only to begin the following year. In full operation, the facility has a total output of 10 GWh worth of NCMA (nickel, cobalt, manganese, aluminium) battery cells, sufficient for more than 150,000 EVs.

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The batteries will be used in EVs based on Hyundai’s E-GMP platform, which currently underpins the Ioniq 5 model as well as the Kia EV6. Larger models are scheduled to be introduced, such as a sedan and an SUV.

The Indonesian government, in a separate statement, also welcomed the agreement. Mr Bahlil Lahadalia, head of the Investment Coordinating Board Indonesia said, “We will oversee this battery cell investment from start to finish,”

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 world.

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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.

The Indonesian government has been insistently building an EV industry ecosystem in hopes of playing a strategic role in the global EV race, such as the establishment of Indonesia Battery Corp. earlier this year.