In a bid to secure a stable supply of battery cells for its battery electric vehicles (BEVs), Hyundai Motor Group and LG Energy Solution 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.
Both the companies will have an equal stake in the JV. With this battery cell manufacturing venture, Hyundai and LG further strengthen a strategic partnership that started more than a decade ago.
The Indonesian government agrees to offer various incentives and rewards to support the stable operation of the plant.
As per the MoU, Hyundai and LG will invest $ 1.1 billion into the JV to build a battery cell plant in Karawang, Indonesia.
Plant construction is scheduled to begin in the fourth quarter of this calendar and will be completed by the first half of 2023. Mass production of battery cells in the new facility will commence in the first half of 2024.
According to both partners, Karawang is the optimal location considering various factors. Indonesia is one of the world’s largest nickel producers, a critical raw material for EV batteries. In addition, 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.
Moreover, 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 the development of several large-scale industrial complexes across several industries, such as automotive, electronics, logistics, construction materials and others.
The new plant can support over 150,000 BEVs every year
Coming up in a 330,000-square-metre parcel of land, the plant will produce a total of 10 GWh worth of NCMA lithium-ion battery cells every year when fully operational, sufficient to cater to 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 Hyundai 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 for EVs is expected to continue rising. As a result, Hyundai Mobis plans to accelerate its effort to expand battery systems and develop cutting-edge technologies to gain a sustainable competitive advantage in the global EV market.
NB: Photo is representational.