Hyundai Motor, one of South Korea’s leading automotive giants, is making huge strides toward building a cradle-to-gate EV supply chain in Indonesia. This move is in line with the strategic policy changes of Indonesia, shifting from mere exports of raw minerals to more value-added production. This will turn into an extremely important breakthrough for both Hyundai and Indonesia in their ambition to place the country at the very top in the global EV market.
Early July saw Hyundai LG Indonesia Green Power (HLI Green Power), a joint venture between Hyundai Motor and LG Energy Solution, announce the completion of an ultramodern manufacturing facility located in Karawang New Industry City, just outside Jakarta, the nation’s bustling capital. According to reports, this factory, under construction for quite a while, officially began production a few days ago; this has been one of the greatest accomplishments not only for Hyundai but for Indonesia’s EV sector as a whole.
This new plant equipped with modern state-of-the-art technology and cutting-edge manufacturing facilities would exclusively manufacture EV batteries. These very EV batteries are going to play a very crucial role in Hyundai Motor’s latest offering in the electric vehicle market—the KONA Electric SUV. The KONA Electric is already manufactured at Hyundai’s auto manufacturing facility located in Cikarang, not very far from Jakarta. This plant originally emerged in 2019 under the banner of Hyundai Motor Manufacturing Indonesia but took a big leap forward in 2022 with the establishment of electric vehicle assembly, deepening Hyundai’s commitment to the Indonesian market.
Hyundai’s establishment of a complete EV supply chain in Indonesia is not strictly for business purposes; it is part of Indonesian government policies toward more value-added production within the country. Indonesia, rich in natural resources, has nickel—very important material content used in EV battery production. It has been encouraging companies to invest in downstream industries instead of exporting raw materials. By making this entire supply chain, Hyundai is directly supporting the economic vision of Indonesia and paving the way for that country to become one of the major manufacturing hubs of electric vehicles in the foreseeable future.
The plant in Karawang is one of the keystones in Hyundai’s plan. The plant has been specifically designed and tailored to meet increasing demand for EVs in Indonesia and other countries worldwide. Production capacity of the factory is likely to increase significantly in the near future, and it will eventually supply not just Hyundai’s domestic production operations but also export markets. This move would also be strategically important for Hyundai, as it could secure a stable and localized supply of EV batteries to enable the production of electric vehicles.
However, this development will have spillover effects on Indonesia’s economy. Setting up of the EV supply chain is bound to provide thousands of jobs in the region, beginning with skilled labor working in industries related to manufacturing to those involved in research and development, logistics, and related fields. Moreover, the entry of such a high-tech facility will attract further investment by related industries supplying components for the batteries, EV charging infrastructure, and other services necessary to sustain electric vehicles.
The Hyundai-LG alliance is also typical of the rising number of tie-ups between auto companies and technology firms in the EV space. With Hyundai’s capability in vehicle manufacturing and LG Energy Solution’s advanced technology in batteries, this joint venture can easily take the lead in the competitive EV market. The cooperation not only increases the quality and efficiency of the products under development but also shortens the cycle of innovation, ensuring Hyundai EVs are equipped with state-of-the-art battery technology.
While Hyundai is growing its presence in Indonesia, the company is also paving the way for the wider adoption of electric vehicles in the region. Beginning production of the KONA Electric SUV in Indonesia clearly underlines how much Hyundai believes in the huge potential of the domestic market. With impressive range, advanced features, and eco-credentials, the SUV easily rallies to its target audience: Indonesian consumers fast becoming aware of the many advantages that come with electric mobility.
Moreover, the support from the Indonesian government, by way of incentives and infrastructure for the EV industry, would further facilitate growth in this sector. In that regard, Hyundai’s investment in the country aligns with the initiatives of the government, thereby making it synergistic and perhaps having Indonesia emerge at the frontline of the EV industry globally.
