Southeast Asia's first battery plant opens in Indonesia
This is a major step toward the country's lofty goal of becoming a top 3 producer of EV batteries.
In a move designed to boost Indonesia's electric vehicle industry, Hyundai and LG Energy Solution launched Southeast Asia's first electric vehicle battery plant.
The battery plant, situated in the province of West Java, will have an estimated annual capacity of 10 gigawatt hours (GWh) of battery cells, sufficient to power 150,000 electric vehicles.
It is a result of a US$1b investment by a consortium comprising Hyundai Motor Group, LG Energy Solution, and the Indonesia Battery Corporation.
The plant will also be integrated with Hyundai’s auto factory, which will produce 50,000 units per year of the Kona Electric vehicle. Indonesia's rich copper and nickel resources were key factors in the decision.
The consortium has plans to increase the plant’s capacity to 20 GWh with investments of US$2b.
Developing this plant is part of Indonesia's strategy to become one of the world's top three producers of EV batteries by 2027.
The Southeast Asian nation seeks to capitalise on its natural resource abundance, specifically nickel to create a domestic EV market.
The country prohibited the export of nickel ores in 2014 and introduced a requirement for producers to refine the raw nickel in Indonesia before export.
Indonesia has the world's largest nickel reserves with an estimated 21 million tons, accounting for 22% of global reserves.
Whilst 70% of all nickel usage goes towards the stainless-steel sector, there is increasing demand for the manufacturing of EV batteries.
The demand for batteries is expected to account for one-third of total nickel demand by 2030, given that countries worldwide look to lower carbon emissions and meet their net-zero targets.
Aware of the huge economic opportunities that nickel provides, Indonesia is geared towards increasing production capacities along the EV supply chain and becoming an EV battery production hub.
To complement its nickel-based battery industry, Indonesia is also developing lithium refineries and anode material production facilities to enhance its nickel-based battery industry.
Indonesia however lacks rich deposits of lithium. Half of the world's lithium is supplied by Australia, which can export this mineral to Indonesia. Presently, most of Australia's lithium exports go to China.
By 2030, Indonesia's goal is to produce EV batteries with a total capacity of 140GWh per year, accounting for between 4 to 9% of global demand.
The country is ambitiously mapping its course within the EV industry to achieve 2.5 million EV users by 2030.
