Hyundai Motor and LG team up to invest $1.1 bln in battery joint venture in Indonesia

Lim Chang-won Reporter() | Posted : July 29, 2021, 15:02 | Updated : July 29, 2021, 15:02

[Courtesy of Hyundai Motor]

SEOUL -- South Korea's Hyundai auto group teamed up with the battery-making wing of LG Group to jointly invest $1.1 billion in the establishment of an equally-owned battery joint venture in Indonesia. Mass production of battery cells is to commence in the first half of 2024. The joint venture underlines efforts by the two groups to bolster their presence in global markets.

The auto group signed a memorandum of understanding with LG Energy Solution (LGES) to set up a battery cell plant in Karawang, the capital of the Karawang Regency of West Java, which is known for automobile manufacturing facilities. Indonesia would offer various incentives and rewards.

Plant construction is scheduled to begin in the fourth quarter of 2021. The plant would produce 10 gigawatts hours (GWh) worth of NCMA lithium-ion battery cells every year, enough for more than 150,000 electric vehicles. LGES has tried to produce a new type of efficient batteries, such as NCM 811 that contains nickel, cobalt and manganese. The proportion of nickel is high so that battery producers can save costs and extend the driving range. An upgraded model called NCMA increases stability by adding aluminum.

Hyundai described Karawang as the most optimal location for its business expansion abroad, saying Indonesia is one of the world’s largest producers of nickel. By 2025, the group would expand its electric vehicle lineup to more than 23 models and sell one million electric vehicles annually in global markets.

The LG Group aims to nurture its battery-making wing as a leading player in the global battery market through a steady injection of capital for pre-emptive facility investment and technical development. LGES will have production bases in five countries including South Korea, the United States, China, Poland and Indonesia. The company aims to boost its production capacity from 120GWh as of the end of 2020 to 260GWh by 2023.
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