Jakarta. Nickel-rich Indonesia has just launched Southeast Asia’s first and largest electric vehicle (EV)  battery manufacturing plant in the West Java industrial regency of Karawang.

The project belongs to HLI Green Power: the joint venture between South Korean automaker Hyundai, Seoul-based battery manufacturer LG Energy Solution, and local firm Indonesia Battery Corporation (IBC). President Joko “Jokowi” Widodo said this factory would help Indonesia secure its spot in the global supply chain.

“This is Southeast Asia's first and largest EV battery cell plant. I’m pretty sure we can win against other countries with this,” Jokowi said at the launching ceremony on Wednesday.

“Because we have the mines, nickel, bauxite, copper, and also the smelters. And there are the cathode and precursor industries, not to mention the batteries and the EV plants -- all integrated into one ecosystem. So when it comes to EVs, who can stop us when we are that competitive?” Jokowi added.

The battery cell plant construction follows the $9.8 billion investment deal that Indonesia clinched with LG back in 2020. Almost a year later, Hyundai and LG announced they would start producing EV battery cells in Karawang. The first phase of the Karawang project has an investment value worth around $1 billion and will produce 10 gigawatt/hour (GWh) battery cells -- enough to power 150,000 EVs. The second phase will take up $2 billion in investment, and the production capacity will increase to 20 GWH. 

Hyundai also has a separate deal worth over $1 billion for a manufacturing plant in Cikarang. Hyundai is already producing its EV model -- Ioniq 5-- in the Cikarang facility. 

A 2024 US Geological Survey report shows that Indonesia enjoys plentiful reserves of critical minerals that are pivotal to EV production. Indonesian nickel reserves stand at 55 million metric tons, making it the world’s largest. Nickel mines in Indonesia produced around 1.8 million metric tons of the metal throughout last year. The HLI Green Power plant will make use of Indonesia’s nickel abundance for its production. 

Indonesia reported that it had recorded $14 billion in South Korean investments over the past 5 years. A large part of the South Korean money went into the domestic processing of Indonesia’s natural resources for greater value-added goods.