Hyundai & LG Teams Up to Build a Battery Factory on Indonesia

by Jul 29, 2021All News, Hyundai, Kia, Slider0 comments

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Hyundai Motor Group has teamed up with LG Energy Solution Ltd. to secure a stable supply of battery cells for its battery electric vehicles (BEVs) and will build a new plant on Indonesia.

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. 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 USD 1.1 billion 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.

With this battery cell manufacturing venture, the Group and LG Energy Solution are further strengthening a strategic partnership that started more than a decade ago.

Karawang: an optimal location for battery cell production

The JV will construct a battery cell production facility in Karawang, the most optimal location for Hyundai Motor Group and LG Energy Solution considering various factors.

Indonesia is one of the world’s largest producers of nickel, a key raw material for EV batteries. The Indonesian government has been aggressively fostering an EV industry ecosystem and infrastructure so that the country can play a pivotal role in the global EV race. 

Karawang is close to the current Indonesian capital of Jakarta. Thanks to Karawang’s well-established transportation networks, including airports, ports, and highways, the city has attracted development of several large-scale industrial complexes across several industries, such as automotive, electronics, logistics, construction materials and others. 

Producing battery cells enough for more than 150,000 BEVs every year

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 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.

Source: HMG

Written by Jose Antonio Lopez

Passionated about Korean cars from Hyundai, Kia & Genesis. Photographer. I love being in nature, hiking. Tech lover.

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