Chung Eui-sun (L), chief of South Korea’s Hyundai Motor Group, and Indonesian President Joko Widodo pose for a photo next to the carmaker’s electrified Genesis G80 sedan in Jakarta on Oct. 25, 2021, during an event to mark Hyundai’s bid to help the Southeast Asian country establish the infrastructure for electric vehicles as part of its expansion strategy. (Yonhap)
SEOUL, June 1 (Korea Bizwire) — Hyundai Motor Group is set to commence the construction of an electric vehicle (EV) battery system plant in Indonesia, investing approximately US$60 million.
Indonesia, along with Thailand, is emerging as a significant country in the EV industry within the Association of Southeast Asian Nations (ASEAN) region.
While Japanese automakers have traditionally dominated the ASEAN market, Hyundai aims to expand its presence in the region as the automotive market transitions to EVs.
Recognizing the immense potential for electric vehicles in Indonesia, Hyundai has identified the country as a key focus for its EV endeavors.
In line with this focus on the EV market, the Indonesian government has ambitious plans to increase the share of EVs to 20 percent by 2025 and 25 percent by 2030.
To support this goal, the government is expected to offer subsidies totaling 5 trillion rupiah (approximately $41.25 billion) for the coming year.
Additionally, the government aims to reach a 23 percent share of renewable energy by 2025 and 31 percent by 2050. These targets are expected to drive increased orders and exports of power sector equipment for domestic companies.
Data from the Indonesian Automotive Industry Association reveals that 505 electric vehicles were sold in Indonesia during the first half of this year, with Hyundai accounting for an impressive 454 of those sales.
This highlights the brand’s strong presence and market share in the country.
Hyundai Motor’s all-electric IONIQ 5 is presented in a showroom at the 2022 Indonesia International Motor Show that ran from March 31-April 10 in the Southeast Asian country, in this photo provided by Hyundai on May 1, 2022.
The groundbreaking ceremony for the battery system plant was held on Wednesday in the Kota Deltamas (Delta Mas City) Industrial Estate, led by Hyundai Energy Indonesia, a joint venture between Hyundai Motor Indonesia and Hyundai Mobis Co.
Delta Mas City, a self-governing city spanning an area of approximately 3,200 hectares in Central Cikarang, Bekasi District, serves as an integrated industrial, commercial, and residential township in Cikarang, West Java.
Notably, Hyundai Motor Co.’s Indonesian production plant is also located within the Industrial Estate in Delta Mas City.
The battery system plant, which is expected to cover an area of 33,000 square meters, is expected to commence mass production of battery systems in the first half of the upcoming year.
Hyundai plans to source battery cells from HLI Green Power, a joint venture between Hyundai Motor Group and LG Energy Solutions Ltd. (LGES).
These battery cells will be integrated with modularized controllers and thermal management devices to create large battery systems.
The company intends to produce two types of battery systems, one with high-capacity cells and the other with low-capacity cells.
These battery systems will be installed in Hyundai’s flagship EV models in Southeast Asia, scheduled for launch next year.
Once the battery system plant is completed, Hyundai Motor Group aims to establish a comprehensive battery production line in Indonesia, covering battery cells, battery systems, and electric vehicles.
Hyundai has been manufacturing its all-electric IONIQ 5 SUV in Indonesia since March of last year.
Additionally, the company is collaborating with LGES to build a battery cell joint venture plant in a new industrial park situated in Karawang, West Java.
In related news, the Korea Testing Certification Institute (KTC) announced on Wednesday the signing of a business agreement with Indonesia’s state-owned Testing and Certification Agency to assist domestic manufacturers with exporting power sector equipment, including electric vehicle chargers, breakers, and power cables.
This photo provided by Hyundai Motor Co. shows its Indonesian production plant.
The PLN Testing and Certification Agency is a subsidiary of Indonesia’s state-owned electric power company Perusahaan Listrik Negara (PLN), which holds a monopoly on electricity distribution in the country and generates the majority of its electricity.
Under this agreement, the KTC has been designated as a testing laboratory for PLN, responsible for the mandatory certification of power sector equipment, including electric vehicle chargers, in Indonesia.
The KTC has become South Korea’s first testing laboratory for electric vehicle chargers through this designation.
The KTC anticipates that this agreement will enable domestic companies to save logistics costs of 10-20 million won ($7,560-$15,130) and accelerate the application process when applying directly to Indonesia.
It will also address the challenges associated with dispatching technical personnel to local areas when additional support is required.
According to PLN Certification’s announcement, the Indonesian government plans to designate the electric vehicle charger as a mandatory SNI (Indonesian National Standard Specification Certification for Product Specifications and Production Process) item in the second half of this year.
By leveraging favorable conditions for EV production and sales, such as a large domestic market and the world’s largest reserves of nickel, a key mineral for EV battery production, the Indonesian government aims to position itself as a Southeast Asian EV hub by 2030.
Given the entry of Hyundai and LGES into the Indonesian market, along with their accelerated investments in the electric vehicle sector, it is anticipated that exports of many domestic companies, including SK Signet Inc., a major domestic electric vehicle charger manufacturer, will increase.
Kevin Lee (kevinlee@koreabizwire.com)
