President Jo Seong-hwan of Hyundai Mobis (front row left), President Kim Jong-hyun of LG Energy Solution (front row right), Indonesia's Minister of Investment Bahlil Lahadalia (back row left on screen), and Toto Nugroho, CEO of Indonesia Battery Corporation (IBC) (back row right on screen) attended the signing ceremony both online and offline. (Photo by Hyundai Motor Company, LG Energy Solution)
[Asia Economy Reporter Changhwan Lee] A leading domestic automaker group and a battery company have joined forces to actively target the ASEAN electric vehicle market and secure leadership in the future electric vehicle market.
Hyundai Motor Group and LG Energy Solution announced on the 29th that they have signed an investment agreement with the Indonesian government to establish a battery cell joint factory with an annual production capacity of 10 gigawatt-hours (GWh) in Indonesia.
The tripartite investment agreement ceremony held yesterday afternoon at LG Energy Solution’s headquarters in Yeouido, Seoul, was attended by Hyundai Mobis President Seonghwan Cho, LG Energy Solution President Jonghyun Kim, and Indonesian Minister of Investment Bahlil Lahadalia.
Hyundai Motor Group and LG Energy Solution have agreed to invest approximately 1.1 billion USD (about 1.17 trillion KRW) to establish the joint factory.
The Indonesian government promised incentives such as a temporary exemption from corporate tax, tariff exemptions on various equipment and parts for operating the joint factory, and enhanced tax benefits related to electric vehicles to support the successful establishment of the joint factory and the expansion of the Indonesian electric vehicle market.
Hyundai Motor Group and LG Energy Solution will each hold a 50% stake in the joint factory.
Both Hyundai Motor Group and LG Energy Solution plan to complete the establishment of the joint venture company by the third quarter after completing various legal procedures, start construction of the joint factory in the fourth quarter, and aim to complete it by the first half of 2023. Subsequently, they plan to begin mass production of battery cells within the first half of 2024.
Both Hyundai Motor Group and LG Energy Solution plan to complete the establishment of the joint venture company by the third quarter after completing various legal procedures, start construction of the joint factory in the fourth quarter, and aim to complete it by the first half of 2023. Subsequently, they plan to begin mass production of battery cells within the first half of 2024.
The battery cells produced at the joint factory will apply LG Energy Solution’s new battery technology, featuring high-performance NCMA lithium-ion battery cells with high content of nickel (N), cobalt (C), manganese (M), and aluminum (A), which enhances output and reduces chemical instability.
These battery cells will be primarily installed in dedicated electric vehicles equipped with Hyundai and Kia’s E-GMP (Electric-Global Modular Platform) starting from 2024, as well as various electric vehicles to be developed in the future.
Status of Karawang Industrial Complex and Nearby Infrastructure Where the Battery Cell Joint Venture Factory Will Be Located (Source: Hyundai Motor Group)
Responding to Explosive Growth in Global Electric Vehicle Demand with the Joint Factory
Both parties expect that through the battery cell joint factory, they will be able to establish a system that can actively respond to the explosively increasing global electric vehicle demand by stably supplying batteries to Hyundai Motor Group’s dedicated electric vehicles.
Hyundai and Kia plan to quickly apply LG Energy Solution’s industry-leading new battery technology when developing future dedicated electric vehicle models. Hyundai Mobis, responsible for battery system production, will play a key role in establishing and operating the joint factory and will strengthen global cooperation with LG Energy Solution.
A Hyundai Motor Group official said, “Through this joint venture, we will maximize LG Energy Solution’s battery technology, a global top-tier company in the electric vehicle battery industry, and our long-accumulated expertise in automobile production and quality management. By securing batteries that combine price competitiveness, technology, and world-class quality, we will enhance the competitiveness of electric vehicle products and actively target the ASEAN region, which will be a key market for future electric vehicles.”
An LG Energy Solution official stated, “Through the establishment of the first overseas joint venture between a domestic battery company and an automaker group, we will maximize synergy creation and strengthen our global electric vehicle market strategy. We will continue to solidify the cooperative relationship between both parties in the future.”
Meanwhile, the agreement ceremony was also attended online and offline by Umar Hadi, Indonesian Ambassador to Korea; Taesung Park, Korean Ambassador to Indonesia; Pahala Nugraha Mansury, Indonesian Deputy Minister of State-Owned Enterprises; and Toto Nugroho, CEO of Indonesia Battery Corporation (IBC:).
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