Battery giant CATL to open $8.1 billion Indonesian plant

UPDATE, Tuesday April 19: Chinese battery company CATL has announced it will partner with two companies to open a US$5.97 billion (AU$8.11 billion) facility in Indonesia.

Through a subsidiary company, CATL will join two state-owned businesses to create the project which will oversee the mining of material, the manufacture of batteries, and the recycling of used batteries.

It will be only the second country outside of China to host a CATL plant, with a facility opening recently in Germany.

The news comes a month after Hyundai announced it would be opening an electric vehicle factory in the country.

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The story to here

March 17: Hyundai has opened its first manufacturing plant in Indonesia, with plans to begin producing electric vehicles at the facility.

Located in Cikarang, around 40 kilometres east of Jakarta, the Hyundai factory will begin with the production of the Ioniq 5, along with the Santa Fe SUV and a number of models designed specifically for Southeast Asian markets.

The Indonesian Government has been pushing ahead with policies to encourage both the manufacturing and sales of electric vehicles (EVs), with plans for its automotive industry to be fully electric by 2050.

"Today, I inaugurate and launch Hyundai Motor Manufacturing Indonesia's plant and the first Ioniq 5 electric car produced in Indonesia," Indonesian President Joko Widodo said at the event.

"I hope that this Ioniq 5 from Hyundai will become an important milestone in the development of Indonesia's electric vehicle ecosystem, and to further accelerate the electric car ecosystem that is more advanced."

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Hyundai is also working with Korean electronics giant LG to build a US$1.1 billion (AU$1.5 billion) battery cell factory in Indonesia, with production to begin in 2024. President Widodo says all domestic EVs will use locally-made batteries by that time.

“Hyundai will keep contributing to the establishment of the electric vehicle ecosystem in Indonesia through the battery cell plant currently under construction,” said Euisun Chung, Executive Chairman of Hyundai Motor Group.

“This will further help support Indonesia to play an important role in the global landscape. We hope Hyundai’s future technologies will be the foundation of greater collaboration with Indonesia.”

The country is a producer of nickel ore, cobalt, bauxite, and copper, which can all be used in the manufacture of EVs.

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Despite neighbouring Indonesia being a right-hand-drive market, Hyundai Australia told WhichCar there are no plans in place at this time to source some models from the new plant.

Shipping and labour costs could make the Indonesian-made Ioniq 5 and Santa Fe more attractive for Hyundai – given the country’s minimum wage is around one tenth of South Korea’s, where Australian market vehicles are currently sourced from.