Hyundai Motor Group has launched a new joint battery cell manufacturing facility with LG Energy Solution in Indonesia, set to supply cells for Hyundai's upcoming Kona Electric.

This makes Hyundai the first automaker in Indonesia with a fully localized production ecosystem for electric vehicles, spanning from battery cells to finished vehicles.

Hyundai Motor Group celebrated the opening of the joint HLI Green Power plant in Indonesia's Karawang New Industry City on Wednesday. The event, attended by key figures such as Hyundai Motor Group Executive Chair Chung Euisun, LG Energy Solution CEO Kim Dong-myung, and Indonesian President Joko Widodo, also marked the beginning of mass production for the new Kona Electric in Hyundai’s existing Indonesian car plant.

"The opening of this battery cell plant and the launch of the Kona Electric mark a major step forward in our collaboration with Indonesia. It is a key milestone in developing a sustainable and robust EV ecosystem,” Chung said.

This facility is a key part of Hyundai's strategy to build a strong electric vehicle ecosystem in Southeast Asia. Hyundai has already made large investments in EV infrastructure in Korea and is now expanding these efforts to Indonesia. The goal is to create a comprehensive local EV ecosystem that includes sourcing raw materials, producing batteries and vehicles, supporting charging networks, and recycling batteries.

HLI Green Power, a joint venture between Hyundai Motor Group and LG Energy Solution, started in September 2021 and began producing battery cells in the second quarter of this year after trial production in late 2022. The plant covers 320,000 square meters and can produce 10 gigawatt-hours of battery cells a year, sufficient to power over 150,000 EVs.

These cells are high-performance nickel, cobalt, manganese and aluminum lithium-ion cells, which enhance power output and reduce chemical instability. They are intended for use in Hyundai and Kia models including the new Kona Electric.

The new Kona Electric, scheduled for launch in Indonesia on July 17, is the second electric vehicle to be manufactured at Hyundai's Indonesian facility, following the Ioniq 5. Hyundai aims to establish Kona Electric as a flagship model in Indonesia's expanding electric vehicle market.

Indonesia is advancing its EV industry to achieve carbon neutrality by 2060, targeting an annual production of 600,000 EVs by 2030. The government plans to convert over 10,000 fleet vehicles to EVs each year from 2021 to 2030, totaling more than 130,000 vehicles.

Currently, EV demand in Indonesia is low, with only 18,000 units sold in 2023, representing about 2 percent of the total automotive market. However, according to Hyundai, this share is projected to reach double digits by 2030, spurred by local initiatives and competition from Chinese EV manufacturers.