Jokowi Inaugurates Indonesia's First EV Battery Factory  

03 Jul 2024

Electric Vehicles

On Wednesday, July 3, 2024, President Joko Widodo (Jokowi) inaugurated Indonesia's first electric vehicle (EV) battery factory, operated by Hyundai LG Indonesia (HLI) Green Power, in Karawang New Industry City (KNIC), West Java.


"Now, with the construction of the EV battery cell factory, we will become an important player in the global supply chain for electric vehicles," President Jokowi stated during the inauguration.  


He highlighted Indonesia's abundant resources, emphasizing that, for decades, these resources were exported in raw form without added value. Now, with the establishment of the first and largest EV battery cell factory in Southeast Asia, Indonesia aims to enhance its competitive edge in the global EV market. 


The factory is part of a broader ecosystem in KNIC, integrating various stages of the EV industry, including mining, nickel availability, bauxite production, smelters, and cathode and precursor production.  


Minister of Investment and Head of the Investment Coordinating Board Bahlil Lahadalia revealed that Hyundai's total investment in Indonesia reaches approximately US$11-12 billion, with $9.8 billion allocated to integrated EV battery processing facilities.  


The factory's capacity is significant, capable of producing tens of thousands of Kona Electric cars annually. Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, underscored the importance of this production in achieving Indonesia's target of producing 600,000 EVs by 2030.  


"The production of 50,000 Kona Electric units per year will significantly increase Indonesia's production capacity," Luhut remarked.  


He also noted the environmental benefits, such as reducing CO2 emissions by approximately 160,000 tons per year and decreasing fuel oil imports by 45 million liters annually. 


Luhut further highlighted the increased domestic content in the Kona Electric's batteries, with the percentage rising from 40% to 80%. This shift is expected to promote the added value of the domestic industry. "This is a preliminary step to promote the added value of the domestic industry," he said. 


Hyundai Motor Group Executive Chair Euisun Chung emphasized the importance of Indonesia's mineral resources in the global EV supply chain.  


"Mineral resources of this nation, such as iron and nickel, are important components in batteries that will mobilize millions of EVs globally," Chung stated. 


The factory is also poised for expansion. Hyundai and LG Energy Solution (LGES) are preparing to develop the second phase of the battery plant, involving a $2 billion investment to add 20 GWh capacity.  


"This is the first and largest EV battery cell plant in Southeast Asia, and I am sure we will be able to win this competition with other countries because the nickel, bauxite, and copper are here," Jokowi declared.