Indonesia launches first EV battery manufacturing facility in Southeast Asia

The plant, launched on July 3, is a joint venture between South Korea's Hyundai Motor Group and LG Energy Solution (LGES), is situated in the West Javan town of Karawang and boasts an impressive annual production capacity of 10 Gigawatt hours (GWh) of battery cells, which is expected to power about 50, 000 of Hyundai’s Kona Electric SUVs every year.

President Joko Widodo, speaking at the facility's inauguration, declared the EV plant a milestone in Indonesia's economic evolution. He further highlighted that Indonesia's transition from a raw material exporter to a value-added manufacturer is a move that will solidify its position in the global EV supply chain.

"We have abundant natural resources, but for decades we only exported it in the form of raw materials without added value. But now with smelters and the electric vehicle battery cell being built, we will become an important global player in the global supply chain for electric vehicles," he said.

The establishment of this plant is part of a larger $9.8 billion EV battery deal signed between Indonesia and LG in 2020. With plans to expand the plant's capacity to 20 GWh through an additional investment of $2 billion, the future of Indonesia's EV industry looks promising.

Hyundai Motor Group's executive chairman, Euisun Chung also expressed optimism about the country's rich mineral resources, such as iron and nickel to be crucial components for the batteries that will drive millions of EVs in Indonesia.

"The mineral resources in this country, such as iron and nickel, are important components of the battery that will mobilise millions of electric vehicles in Indonesia," Euisun Chung said.

Indonesia in 2020 banned the exportation of raw nickel with the intent of encouraging investments into domestic processing. Now, with the launch of the EV battery plant, the country is poised to become a formidable force in the EV arena.

Climate crisis is pushing the world to seek cleaner air and more sustainable modes of transportation and EVs have proven to be a more climate-friendly alternative compared to traditional gasoline-powered cars.

Earth Justice highlights that "Over its lifetime, the average new electric vehicle produces about half the greenhouse gas emissions of an equivalent vehicle burning gasoline or diesel."