JAKARTA: Hyundai Motor Group launched a new automotive plant today that will produce Indonesia's first locally assembled electric vehicle, part of President Joko Widodo's goal of developing a full EV supply chain using the country's mineral resources.
Reuters did not name the EV model but The Korea Herald said the opening of the plant also meant the start of mass production of the Ioniq 5, a model that had already been launched in Malaysia on March 9.
At the moment, the Malaysian batches of Ioniq 5 are being imported from Hyundai's plant in South Korea.
According to The Korea Herald, the Ioniq 5 will become Hyundai’s signature vehicle in the Indonesian market in the near future, and contribute in cementing its reputation as a leading EV maker there.
While initial production is for the Indonesian market, the long term plan is for the plant to export its cars to South-East Asian market as well.
At the plant's inauguration today, Jokowi, as the president is known, said the government was providing incentives and had removed red tape to try to boost investment in EV development.
"We need to be an important player in the global supply chain of electric cars," he said.
"Our country has large mineral resources that can be used for development of electric cars."
Indonesia is a major nickel ore producer, an important material for EV batteries.
It also produces cobalt, also used for batteries, and has large deposits of bauxite and copper ores, which can be used for EV production, Jokowi said.
Downstream development of Indonesia's natural resources has been one of Jokowi's key economic goals to lure foreign investment and create jobs.
By 2024, all EVs produced in Indonesia will use locally made batteries and other key components, he added.
Hyundai in 2019 said it would invest US$1.55 billion up to 2030, with starting capacity of 150,000 vehicles per year, to be later expanded to 250,000 annually.
The group's chairman Euisin Chung said the new plant would also be linked with a Hyundai-LG joint venture battery plant, which is scheduled to open in 2024.
LG Energy Solution (LGES) and Hyundai started construction of the US$1.1 billion EV battery plant in September, which at its full capacity is expected to produce 10 gigawatt hours of battery cell power.
