LG Energy Solution and Hyundai Motor Group will establish a joint venture for electric vehicle batteries in Indonesia. LG Energy Solution is the world's No.1 electric vehicle battery company and will invest 1.17 trillion won in a joint venture to raise the competitiveness of electric vehicle batteries. It will build a battery factory for 150,000 electric vehicles in Indonesia and establish a stable supply chain management (SCM) for electric vehicle manufacturing.
LG Energy Solution announced on the 29th that it signed an investment agreement with the Indonesian government to establish a battery joint venture with an annual capacity of 10 giga watt hours(GWh) in Indonesia with Hyundai Motor Company on the 28th.
LG Energy Solution will build a factory that will produce batteries that can accommodate for 150,000 electric per year, and continue to expand production scale in line with growing demand in the electric vehicle market in Indonesia by the end of 2023.
The three-party investment agreement was held at the LG Energy Solution headquarters with Jonghyun Kim, president of LG Energy Solution, and Sungwhan Cho, president of Hyundai Mob is together, while Minister of Investment Balil Lahadalia attended online. The investment in the joint venture is $1.1 billion (about 1.17 trillion won).The Indonesian government pledged to provide incentives such as corporate tax, exemption from tariffs on various facilities and main parts for plant operation, and tax benefits for electric vehicles in order to support the establishment of a joint factory and expansion of the electric vehicle market.
The joint plant will be shared 50:50 between LG Energy Solution and Hyundai Motor Company. LG Energy Solution and Hyundai Motor, as global top-tier companies representing Korea, plan to further solidify their close cooperative relationship for 10 years with this a joint battery plant establishment.
LG Energy Solutions, the world's largest battery company, is targeting the global battery market with its quaternary next-generation battery products.
Based on its competitiveness in manufacturing high-nickel, cobalt, manganese, and aluminum (NCMA) batteries, LG Energy Solution will target the ASEAN car market with securing a stable supplier, the Hyundai Motor Group.
Hyundai Motor plans to accelerate its presence in the electric vehicle market by securing LG Energy Solution as a battery supplier. A competition among finished vehicle is fierce when it comes to lowering the manufacturing cost in the electric vehicle market. Hyundai Motor is expected to strengthen its supply chain for electric vehicle production in Indonesia with LG Energy Solution.
The joint venture plans to produce high-nickel batteries containing more than 90% nickel. The battery is a high-performance electric vehicle battery using LG Energy Solution's own new battery and material technology. By increasing the nickel content, the mileage was increased and the cobalt content was reduced to maximize cost-effectiveness. Reinforcing aluminum allowed further strengthening the safety of electric vehicle batteries.
The battery material supply chain will also be strengthened.Indonesia, ranked first in the world in both reserves and mining of nickel, which is a main material for batteries, is actively promoting the development of the electric vehicle industry at the government level. Indonesia is a country that is considered as a strategic country to target the global electric vehicle market beyond the ASEAN market in the future.
An official from LG Energy Solution said, “We will maximize synergy effect through the establishment of the first overseas joint venture between a domestic battery company and a vehicle company, and will strengthen our entry into the global electric vehicle market.”
A Hyundai Motor Group official said, “We will enhance the competitiveness of electric vehicle products by stably securing batteries with the world’s highest quality, and will plan to actively target the ASEAN region, which will become a main market for electric vehicles in the future.”
By Staff Reporter Jiwoon Kim (firstname.lastname@example.org)