On Thursday, South Korea’s LG Energy Solution and Hyundai Motor Group said, they plan on setting up a joint venture (JV) in Indonesia which will produce batteries for electric vehicles (EV) and plan on investing $1.1 billion each, with both companies owning a 50% stake in the JV.
The JV will streamline the sourcing of batteries for the carmakers as well as Hyundai Motor’s sister concern Kia Corp and ensure a stable supply of EV batteries at competitive prices.
In a joint statement, LG Energy Solution (LGES) said, LG Chem Ltd, the wholly owned battery subsidiary of LG Chem Ltd, along with Hyundai have signed a memorandum of understanding with the Indonesian government to build the plant.
The development comes at a time when global automakers move to secure EV batteries in anticipation of a rise in sales with many governments providing subsidies and quotas in their efforts to slash carbon emissions.
Construction of the plant will commence in the fourth quarter of this year and will be completed by the first half of 2023, said the companies.
Incidentally, Indonesia is promoting the domestic development of EV and battery production to create a downstream industry for the country’s rich supply of nickel laterite ore, a lithium battery ingredient.