Hyundai and LG partner to invest $1.1 billion in Indonesian battery plant
Hyundai Motor Group and LG Energy Solution have announced a Memorandum of Understanding (MoU) with the Government of Indonesia to manufacture BEV batteries in the country through a new joint venture (JV). As part of the JV, Hyundai and LG will invest a total of $1.1 billion in the construction of a battery plant in Karawang, near the country’s capital of Jakarta.
Hyundai Motor Group is the global mobility umbrella to marques such as Hyundai, Kia, Genesis, and the upcoming Ioniq line of EVs. Many will soon sit upon its dedicated Electric-Global Modular Platform (E-GMP).
The platform was co-developed in 2020 with California-based EV startup, Canoo, and will lead the way toward the automotive conglomerate’s accelerated transition toward BEVs.
This past May, Hyundai Motor Group announced plans to invest $7.4 billion in future EV development and production in the US by 2025. With a growing number of BEVs across multiple EV brands on the way, Hyundai looks to secure a stable supply of lithium-ion battery cells moving forward.
LG Energy Solution is a new battery production unit of LG Group that was spun out of LG Chem toward the end of 2020.
Last December, Electrek reported that LG Energy Solution had signed a previous MoU with the Indonesian government for $9.8 billion to produce batteries in the country.
With today’s announcement, LG looks to grow its relationship with the Government of Indonesia with a new battery plant alongside Hyundai.
Hyundai and LG to invest $1.1 billion in Indonesian battery plant
A press release from Hyundai has officially announced the new joint venture with LG, to manufacture batteries in Karawang, Indonesia. The $1.1 billion will go toward construction of a facility on a 74-acre plot of Indonesian turf, beginning this year.
Indonesia is one of the world’s largest producers of nickel, a vital raw material needed for EV batteries.
Deals like this, in addition to the the aforementioned $9.8 billion LG agreement, showcase the Indonesian government’s aggressive strategy to support a booming EV industry ecosystem, while padding its own GDP as a result.
As part of the MoU, the Indonesian government has agreed to provide various incentives and rewards to the joint venture to support the stable operation of the upcoming plant.
Both companies, which will own a 50% share in the venture, anticipate the battery plant to be completed in the first half of 2023, with mass production of lithium-ion battery cells anticipated a year later.
When construction is complete in 2024, Hyundai anticipates an annual capacity of 10 GWh worth of battery cells, enough to be fit within over 150,000 future BEVs on the E-GMP.
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