Hyundai Motor Group has teamed up with LG Energy Solution to build an electric vehicle (EV) battery cell manufacturing joint venture (JV) with US$1.1bn investment in Indonesia. LG Energy, Hyundai battery partnership will boost Indonesia strategic presence in EV market, says GlobalData.
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:
“Indonesia, which has reserves of nickel and cobalt used in Li-ion cell batteries, is well positioned to meet that demand amid advancements in EV technology. As a result, the 50:50 JV will be of high strategic importance to Indonesia from an EV perspective and surely a win-win for both LG and Hyundai. Hyundai, which aims to expand the portfolio of EVs to 44 models by 2025, will secure adequate supply for its future EVs and LG will strengthen its global presence in the EV market.
“Mass production of battery cells in the new facility is expected to commence in the first half of 2024. 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. Hyundai will mass-produce battery cells, which will be deployed in Hyundai and Kia’s models built on the Electric – Global Modular Platform (E-GMP).
“The Indonesian government will offer tax benefits for local production, which were announced long-back to boost the domestic EV manufacturing. Apart from LG energy, the government partnered with Contemporary Amperex Technology Ltd (CATL) for local production of lithium-ion batteries using the country’s surplus nickel output.
“Automakers with aggressive targets for transition away from internal combustion engines are committing to multi-billion-dollar deals to supply cells to their upcoming EVs. LG Energy Solution has secured supply contracts with several large EV manufacturers, including Volkswagen, Tesla and General Motors. LG energy and Hyundai partnership will reassure supply chain stability to the EV market, which is witnessing semiconductor shortages due to the COVID-19 pandemic.”