South Korea’s LG Energy Solution (LGES) and Hyundai Motor Group have started construction on a $1.1 billion plant to make batteries for electric vehicles (EVs) in Indonesia, amid a push by the Southeast Asian nation to tap its rich nickel reserves.
In a video broadcast on Wednesday, Indonesian President Joko Widodo said the plant was the first EV battery facility in Southeast Asia and signalled the government’s commitment to use its nickel resources to develop downstream industries.
The battery plant in the Indonesian province of West Java is part of a $9.8 billion investment plan here for LGES, according to Indonesia’s Investment Minister Bahlil Lahadalia, spanning the nickel and battery supply chain.
Jong-hyun Kim, the chief executive of LGES, which is wholly owned by LG Chem Ltd, said in a virtual address batteries will be produced using the company’s latest technology and installed in various Hyundai Motor and Kia Motors Corp EVs.
Plant construction will be completed by the first half of 2023, a joint statement from Hyundai Motor Group and LGES said, adding that mass production of battery cells in the new facility is expected to commence in the first half of 2024.
When fully operational, the facility is expected to annually produce 10 gigawatt hours (GWh) of NCMA (nickel-cobalt-manganese-aluminum) lithium-ion battery cells to power more than 150,000 EVs.
In addition, the facility will be ready to increase its production capacity up to 30 GWh to meet future growth, the statement said.
Hyundai Motor Group and LGES expect to develop in Indonesia a battery industry, as well as assembly plants for EVs and recharging infrastructure.