South Korean conglomerates Hyundai and LG will jointly build a $1.1 billion electric vehicle battery plant in Indonesia to take advantage of the Southeast Asian country’s potentially vast consumer market and rich natural supply of nickel.
The 50-50 joint venture, slated to operate in the Karawang regency, Indonesia’s West Java province, will break ground this year and start production in 2024 with annual capacity for 10 gigawatt hours of battery cells, Hyundai said in a statement on Thursday.
Hyundai and LG can churn out 150,000 battery-run electric vehicles at that capacity, the statement says. The factory built on 330,000 square meters of land will help Hyundai and its subsidiary Kia “secure a stable supply of EV batteries at a competitive price” for future electric vehicles, it adds.
Indonesia itself makes the formula work, analysts say, due to an abundant supply of inexpensive nickel from the archipelago’s vast mines.
Indonesian nickel production has increased rapidly since 2014, turning the country into the world’s second-largest nickel producer behind China, says Rajiv Biswas, Asia-Pacific chief economist with research firm IHS Markit. Nickel laterite ore is a lithium battery ingredient.