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Indonesia inks $1.1b deal with Korean firms to build EV battery cell factory
A deal signed with a consortium of South Korean automotive industry firms for a US$1.1 billion battery cell factory gets the ball rolling in Indonesia’s EV plan.
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An electric vehicle is plugged in for charging. Indonesia is making progress in its plan to become a major player in the electric vehicle industry with a US$1.1 billion deal for a battery cell factory signed with South Korean automotive industry firms on Wednesday. (Shutterstock/-)
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ndonesia has inked a US$1.1 billion (Rp15.9 trillion) deal with a consortium of South-Korean companies to build an electric vehicle (EV) battery cell factory that will employ around 1,000 workers.
The memorandum of understanding (MoU) was signed in an online event on Wednesday by Investment Minister Bahlil Lahadalia as well as representatives of state-owned Indonesia Battery Corporation (IBC) and South Korean companies Hyundai Motor Company and LG Energy Solution.
The Korean consortium, held in equal parts by the two Korean firms, will establish a joint venture with IBC to build a battery cell facility in Karawang, West Java, with a production capacity of 10 gigawatt hours (GWh) for Hyundai's electric vehicles.
The two parties aim to start construction in the fourth quarter of this year and complete it in the first half of 2023, with a view to commencing mass production in the first half of 2024.
A cell is a key element of a battery that converts chemical energy into electrical energy.
As reported earlier, Hyundai began work on a $1.55 billion EV car factory in West Java in 2019 with the target of eventually reaching a production capacity of 250,000 vehicles.
Hyundai and LG are not the only foreign companies eying Indonesia’s EV battery industry. The government inked an agreement with Chinese battery maker CATL last year for $5.1 billion to be invested in Indonesia.
