Hyundai Announces $1.55b Investment in Indonesian Electric Vehicle Plant

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NOVEMBER 26, 2019

Jakarta. South Korean automotive giant Hyundai Motor Company has announced a $1.55 billion investment plan to develop electric vehicles in Indonesia over the next decade.

Hyundai made the announcement when President Joko "Jokowi" Widodo visited the company's factory in Ulsan, South Korea, on Tuesday.

Won Hee Lee, Hyundai's chief executive officer, and Bahlil Lahadalia, the head of Indonesia's Investment Coordinating Board (BKPM), signed a memorandum of understanding for the investment during the visit.

Also present at the signing ceremony were Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan and Eon Tae Ha, Hyundai's executive vice president.

Bahlil said he believed the Hyundai investment would benefit the Indonesian economy, not least by creating 3,500 new jobs.

"In addition, Hyundai will also build a training center and a research and development center for electric cars," Bahlil said in a statement.

Bahlil said Indonesia had asked Hyundai to maximize the use of domestic raw materials and collaborate with local businesses to make the electric vehicles in its Indonesian factory.

"Most of the materials for electric car batteries can come from Morowali. We also have many rubber and tire producers," Bahlil said.

Morowali is the main nickel-producing region in Southeast Sulawesi.

Indonesia has aired its intention to become a global production center for electric vehicles by leveraging its abundant nickel ore resources.

Nickel comprises up to 80 percent of the materials used in lithium-ion batteries that power modern electric vehicles from Tesla to Xiaomi scooters.

Hyundai plans to carry out its investment in two stages. In 2019-2021, the company will focus on investing in an internal combustion engine car manufacturing plant and will export at least 50 percent of its total production.

In the second stage, from 2022 to 2030, Hyundai will develop an electric car manufacturing plant, transmission plant, research and development center and training center. Hyundai aims to export 70 percent of its car production by this period.

The Hyundai plant is expected to start production in 2021, with a capacity of 70,000 to 250,000 units per year, including electric cars.

Hyundai said Indonesia's nickel resources played a major role in tilting its decision to invest in the local electric vehicle plant.

 

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President Joko 'Jokowi' Widodo has stated an ambition to turn Indonesia into a center for electric vehicle production in Southeast Asia by 2030. (Antara Photo/Wahyu Putro A.)

Two Million Electric Motorcycles to Roll Off Production Line by 2025
BY :HERMAN

NOVEMBER 29, 2019

Jakarta. The government is expecting two million electric motorcycles to roll off the local production line by 2025 – 20 percent of the total number of motorcycle production by that time, for both local and export markets, Industry Minister Agus Gumiwang Kartasasmita said on Friday.

Indonesia already has several electric motorcycle manufacturers, including Gesits Technologies Indo. But their production capacity is still negligible compared to what internal combustion engine manufacturers like Honda, Yamaha, Suzuki, Kawasaki are capable of.

On average, these behemoths churn out 6.5 million motorcycles every year.

Agus, however, said the government intends to turn things around in favor of electric motorcycle, in line with President Joko 'Jokowi' Widodo's ambition to turn Indonesia into a center of electric vehicle production in Southeast Asia by 2030.

"The government expects motorcycle production to continue to grow to 10 million units per year by 2025. One million of those will be set aside for export. We also want around 20 percent of that total national production, or 2 million units, to be electric motorcycles," Agus said.

President Jokowi issued a presidential regulation early this year to try to accelerate the development of battery-based motorized electric vehicles for road transportation.

Under the regulation, electric cars and motorcycles will be eligible for cuts in the luxury goods tax (PPnBM) and title transfer fees.

The regulation also mandated local producers to use at least 40 percent local components in 2019-2023, 60 percent in 2024-2025 and 80 percent from 2026 onward.

The government believes local manufacturers would be able to meet these targets easily.

"Since 2010, motorcycle production has increased to an average of 6.5 million units per year. Many local component makers have also expanded in line with that increase. Based on data, domestic components make up 90 percent of motorcycles being produced at the moment," Agus said.

He said motorcycle production had exceeded 6.2 million units between January and October this year. Around 5.5 million units went to the domestic market, and the rest were exported to the Philippines, Thailand, Bangladesh, Japan, Western Europe and Latin America.