South Korea's Hyundai Motor Group and LG Energy Solution Ltd. on Wednesday began building a $1.1 billion lithium ion battery cell plant for electric vehicles in Indonesia, which Indonesian President Joko Widodo said would be the first in Southeast Asia.

Breaking ground for the construction of PT HKML Battery Indonesia plant, scheduled to commence production in the first half of 2024, Widodo called it one of his government's "major strategies for immediately getting out of the trap as a raw material exporting country."

"Indonesia has the biggest nickel reserves in the world," the president said during the hybrid groundbreaking ceremony in Karawang, a new industrial city in West Java Province.

"With such a potential, I believe that within three or four years, under a good management, Indonesia can become the main producer of nickel-based products, such as lithium batteries, electric batteries and electric vehicle batteries," he added.

Hyundai Motor Group Chairman Chung Euisu said that by developing the industry, "Indonesia is expected to play an important role as the center for the ASEAN electric vehicle market in the future."

The reference was to the 10-member Association of Southeast Asian Nations, of which Indonesia is a leading member.

LG Energy Solution Ltd. CEO Kim Jong Hyun expressed his belief that once the factory is completely built, Indonesia will be one step closer to building the world's first supply chain of integrated electric vehicles.

Both Chung and Kim appeared virtually in the hybrid groundbreaking ceremony.

For building the factory, Hyundai Motor Group set up a consortium comprising Hyundai Motor Co., KIA Corp., Hyundai Mobis and LG Energy Solution, teaming up with the Indonesia Battery Corp.

Investment Minister Bahlil Lahadalia said the plant's construction is part of a $9.8 billion integrated electric vehicle battery project plan under an agreement with South Korea.

According to a press statement by Hyundai's subsidiary PT Hyundai Motors Indonesia, the plant will have an annual capacity of 10 gigawatts, enough to cover approximately 150,000 electric vehicles.

Indonesia has intensively planned to move up its electric vehicle supply chain from mining the ore to refining it and manufacturing the batteries and vehicles.

The Ministry of State Enterprise said the country holds 24 percent of the world's nickel reserves, followed by Australia and Brazil.

==Kyodo

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