Hyundai Motor and LG Chem Promoting Joint Venture Battery Plant in Indonesia

Koo Kwang-mo (right), chairman of LG Group, shakes hands with Chung Eui-sun, senior vice chairman of Hyundai Motor Group during their meeting at LG Chem’s Ochang plant in Cheongju, North Chungcheong Province, on June 22.

Hyundai Motor Group and LG Chem are reportedly promoting the establishment of a joint venture electric vehicle (EV) battery plant in Indonesia. Indonesian government officials are visiting Korea to discuss investment conditions.

Erick Thohir, Indonesia’s minister of state owned enterprises, and Bahlil Lahadalia, chairman of Indonesia Investment Coordinating Board, arrived in Seoul on Sept. 24. The Indonesian government has been working hard to attract LG Chem’s battery plant following Hyundai Motor’s car plant outside Jakarta. Hyundai Motor and LG Chem are considering setting up their first battery joint venture in Indonesia.

Before leaving the country, Bahlil was quoted as saying, “We are visiting Korea to solve the electric vehicle battery plant issue.” In particular, he said the battery plant will be built on a 100 hectare site in Batam, Indonesia. He also said on Sept. 14 that Indonesia has signed agreements on investment in battery factories with large companies from two countries. He said the agreements involve investment of 70 trillion rupiah (5.5 trillion won) and 100 trillion rupiah (eight trillion won), respectively.

Bahlil did not mention the names of the companies, but Luhut Pandjaitan, coordinating minister for maritime affairs and investment of Indonesia, told the local press on Sept. 15 that Indonesia has signed investment agreements on developing lithium batteries with LG Chem of Korea and CATL of China.

Erick also said on Sept. 16 that he will visit Korea for meetings with Korean companies. Accordingly, the Indonesian officials are expected to meet with officials of Hyundai Motor Group and LG Chem during their visit to discuss investment conditions related to the planned battery plant.

But Hyundai Motor Group and LG Chem say nothing has been decided on the joint venture for electric vehicle batteries in Indonesia. Hyundai Motor is investing 1.8 trillion won in Indonesia to build a car factory capable of producing 250,000 units a year. Although its initial goal was to complete the project by the end of 2021, the COVID-19 pandemic may delay the completion of the plant. Not only internal combustion-powered cars but electric vehicles can be produced at this plant, according to industry sources.