A Giant Leap For EV Ambitions: Hyundai And LG Energy Unveil Indonesia’s First Battery Cell Factory

South Korean battery producer LG Energy Solution and carmaker Hyundai Motor have opened a $1.2 billion battery cell plant in Indonesia, a first for the country that strives to build a complete EV manufacturing ecosystem.

Located in Karawang, West Java province, the plant has been developed by HLI Green Power, a 50:50 joint venture between LG Energy Solution and Hyundai Motor.

The facility, announced in 2021, boasts an annual production capacity of 10 Gigawatt-hours (GWh) of NCMA (nickel-cobalt-manganese-aluminum) lithium-ion battery cells, sufficient to power 150,000 battery electric vehicles (BEVs).

A second phase of development, estimated at $2 billion, is planned to expand the plant's capacity by an additional 20 GWh. This expansion is part of Hyundai and LG's broader commitment to invest over $11 billion in Indonesia's EV ecosystem.

Strategically located near Jakarta and adjacent to a Hyundai car manufacturing facility, the battery cells from the Indonesian plant will be used in Hyundai and Kia’s EV models.

At the inauguration ceremony on Wednesday, Minister of Investment Bahlil Lahadalia praised the facility as Southeast Asia's first of its kind, stating that Indonesia will be the first country to have a fully integrated EV supply chain, from battery cell production to vehicle manufacturing.

Indonesia is developing an integrated electric vehicle (EV) supply chain and aims to become one of the world’s top three producers of EV batteries by 2027. The country is seeking to take advantage of natural resource abundance, particularly nickel, to create a domestic EV market.

Further, Indonesia aims to produce EV batteries with a total capacity of 140GWh per year by 2030, which will account for between 4 per cent and 9 per cent of global demand. 

While several smelters processing nickel ore into battery materials are already operational, primarily under Chinese control, the LG-Hyundai plant in Karawang is Indonesia's first dedicated battery cell production facility.

Indonesia has also partnered with China’s CATL, the world’s biggest EV battery manufacturer, to develop a nearly $6 billion EV ecosystem, though progress has been slow.

President Joko Widodo, who attended the launch ceremony, expressed optimism, stating that the new facility will position Indonesia as a "global player in the EV supply chain".