Indonesia: 1 Billion Dollar Investment Hyundai Motor, LG Energy Solution to Build New Battery Cell Plant
Hyundai Motor Group, LG Energy Solution have signed a MOU with the Indonesian Government to set up a joint venture in order to produce battery cells for battery electric vehicles in Indonesia. In this background, the companies will establish a new battery cell plant in Karawang, Indonesia.
Seoul/South Korea – Hyundai Motor Group has teamed up with LG Energy Solution to secure a stable supply of battery cells for its battery electric vehicles (BEVs). The Group and LG Energy Solution announced that they have signed a Memorandum of Understanding (MOU) with the Government of Indonesia to establish a joint venture (JV) in Indonesia to manufacture battery cells for BEVs.
On July 28, Sung Hwan Cho, President and CEO of Hyundai Mobis, and Jong Hyun Kim, President and CEO of LG Energy Solution, attended the MOU signing ceremony held at LG Energy Solution headquarters in Seoul, South Korea. Bahlil Lahadalia, the Investment Minister of Indonesia; and Toto Nugroho, President Director of Indonesia Battery Corporation (IBC), joined the ceremony virtually.
Under the MOU, Hyundai Motor Group and LG Energy Solution will invest a total of 1.1 billion dollars into the JV to build a battery cell plant in Karawang, Indonesia. The Group and LG Energy Solution will each have a 50 percent ownership stake in the JV. The Indonesian Government agrees to offer various incentives and rewards to support the stable operation of the plant.
Plant construction is scheduled to begin in the fourth quarter of 2021 and will be completed by the first half of 2023.
Mass production of battery cells in the new facility is expected to commence in the first half of 2024.
The new battery cell factory in Karawang will be built on a 330,000-square-meter parcel of land. When fully operational, the facility is expected to produce a total of 10 GWh worth of NCMA lithium-ion battery cells every year, enough for more than 150,000 BEVs.
Battery cells produced by the plant in Karawang will be used in Hyundai Motor and Kia’s EV models built upon the Group’s dedicated BEV platform, Electric-Global Modular Platform (E-GMP). The new factory will help Hyundai and Kia produce vehicles with high efficiency, performance, and safety by supplying battery cells optimized for the two automaker’s BEV models.
Cooperation with LG Energy Solution will also help Hyundai Mobis secure a stable supply of EV battery cells in the upcoming years, as the global demand of EVs is expected to continue rising. Hyundai Mobis plans on accelerating its effort to expand the production of battery systems and to develop cutting-edge technologies to gain a sustainable competitive advantage in the global EV market.
The Group has concentrated its efforts to become a global EV powerhouse. By 2025, the Group aims to expand its BEV lineup to more than 23 models and sell 1 million BEVs annually in global markets.