SEOUL (Reuters) – South Korea’s Hyundai Motor Group and LG Chem Ltd (051910.KS) are considering establishing an electric vehicle (EV) battery cell manufacturing joint venture in Indonesia, a person familiar with the matter told Reuters on Tuesday.
FILE PHOTO: An attendee takes a picture of the 2019 Hyundai Kona Electric vehicle being displayed at the New York Auto Show in the Manhattan borough of New York City, New York, U.S., March 28, 2018. REUTERS/Brendan McDermid
The size of the investment and its production capacity have not been decided, said the person, who declined to be identified as discussions are private.
Global automakers are moving to secure electric vehicle batteries in anticipation of a rise in EV sales due to government subsidies and quotas designed to cut carbon emissions.
In recent years, battery maker LG Chem has set up separate ventures with both General Motors Co (GM.N) and Geely Automobile Holdings Ltd (0175.HK). LG Chem supplies batteries to Hyundai, Tesla (TSLA.O) and other automakers.
LG Group Chairman Koo Kwang-mo met Hyundai Motor Group Executive Vice Chairman Euisun Chung on Monday to discuss cooperation in EV batteries, including future battery technology.
LG Chem and Hyundai Motor Group confirmed the meeting but said nothing had been decided concerning a potential venture.
“Hyundai Motor Group is collaborating with LG Chem on various projects. However, no concrete discussion has been made on a battery joint venture in Indonesia,” Hyundai said in a statement to Reuters.
A battery cell joint venture would be the first for Hyundai, widely viewed as a relative latecomer to the EV market. The company is trying to challenge the dominance of Toyota in Indonesia with its upcoming car factory there.
“Indonesia is committed to promoting the EV industry, but it is not yet ready in terms of charging infrastructure and consumers’ purchasing power. A battery joint venture is likely to be a mid- or longer-term plan,” analyst Lee Jae-il at Eugene Investment & Securities, said.
The head of Indonesia’s investment board (BKPM) and a spokesman to Indonesia’s Coordinating Ministry of Maritime and Investment Affairs have not responded to Reuters’ requests for comment.
Reporting by Hyunjoo Jin and Joyce Lee; Additional reporting by Heekyong Yang in SEOUL and Fransiska Nangoy in JAKARTA; Editing by Christopher Cushing and Stephen Coates