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| Indonesian President Joko Widodo, left, gives a congratulatory speech at the joint Hyundai Motor Group―LG Energy Solution battery plant groundbreaking ceremony held in Karawang New Industry City (KNIC), Wednesday. Upper right, Hyundai Motor Group Chairman Chung Euisun, bottom right LGES CEO Kim Jong-hyun. Courtesy of Hyundai Motor Group |
By Kim Hyun-bin
Hyundai Motor Group and LG Energy Solution (LGES) officially kicked off construction of their joint electric vehicle (EV) battery plant in Indonesia to make a grab for the lead in the global EV market.
According to the two companies, a groundbreaking ceremony was held at the construction site for the battery plant in Karawang New Industry City (KNIC), Wednesday, near the Indonesian capital Jakarta and Hyundai's existing car factory.
From the Indonesian side, Indonesian President Joko Widodo and several ministers and government officials attended the ceremony, while Hyundai Motor Group Chairman Chung Euisun and LGES CEO Kim Jong-hyun attended the ceremony online due to the COVID-19 pandemic.
The ceremony kicked off with welcoming speeches by Chairman Chung and CEO Kim.
"Hyundai Motor Group is focusing on securing future competitiveness in the EV sector to become a global leader," Chung said. "As part of the effort, we have decided to construct a joint Indonesia battery cell plant with the leading EV battery maker LG Energy Solution."
"This is a meaningful day, as Indonesia's first next-generation battery cell plant will open the battery industry's future," Kim said. "The joint plant gets us one step closer to establishing the world's first EV-integrated supply chain system."
The two companies aim to complete construction of the plant in the first half of 2023 and start mass production in the first half of 2024 with an annual capacity of 10 gigawatts, enough to power approximately 150,000 EVs.
The plant could be expanded to increase production capacity by 30 gigawatts when needed to meet a rise in EV demand.
The plant is aimed at securing a stable supply of EV batteries for Hyundai Motor Group's two main carmaker affiliates ― Hyundai Motor Co. and Kia Corp. ― starting in 2024, Hyundai said.
The batteries produced at the plant embed LGES's latest battery technologies that maximize the properties of nickel, cobalt and manganese and reduce chemical uncertainties by adding in high-performance aluminum.
Hyundai Motor Group aims to expand its EV lineup to more than 23 models and sell 1 million EVs by 2025, and plans to install the batteries as part of Hyundai and Kia's E-GMP platform.
In the first half of the year, the two companies agreed to construct a joint battery plant, each taking half of the factory stakes. In July, the two companies signed a cooperation deal with the Indonesian government to inject $1.1 billion for the plant and the following month established the joint venture.
The two companies believe the Indonesian battery plant will be able to meet the drastically rising global demand for EVs. In 2019, the Indonesian government started to exempt luxury taxes for EVs and provide incentives pushing to foster the EV industry and supply chain, ranging from raw materials mining to manufacturing EVs and batteries.
