Hyundai Motor and LG Energy Solution sign a MoU with the Indonesian government for EV business. ©Yonhap

SEOUL, July 29 (Yonhap) -- South Korean automaker Hyundai Motor Group and LG Energy Solution Ltd., LG's battery unit, said Thursday they will form a US$1.1 billion joint venture to build an electric vehicle battery plant in Indonesia.

Hyundai Motor Group and LG Energy signed a memorandum of understanding with the Indonesian government to build the lithium-ion battery cell plant with an annual capacity of 10 gigawatts by 2025, enough for over 150,000 EVs.

The two Korean companies will each hold half of the joint venture, while the Indonesian government pledged tax breaks and other incentives for the project.

The new production line will break ground in the fourth quarter of 2021 and begin mass production in the first half of 2024, the two firms said.

The battery factory will be built in an industrial cluster in Karawang, near the Indonesian capital Jakarta and also close to Hyundai Motor's car factory.

The world's fifth-largest automotive group said the partnership is aimed at securing a stable supply of batteries for its upcoming EVs of its two affiliates -- Hyundai Motor Co. and Kia Corp.

"The new factory will help Hyundai and Kia produce vehicles with high efficiency, performance and safety by supplying battery cells optimized for the two automaker's BEV models," the joint statement said, referring to battery electric vehicles.

Hyundai Motor Group aims to expand its EV lineup to more than 23 models and sell 1 million EVs by 2025.

Indonesia, the world's largest nickel producer, has set a goal of becoming a major player in the global EV supply chain, ranging from raw material mining to manufacturing batteries and EVs.

Source: https://en.yna.co.kr/view/AEN20210729003000320