Hyundai Motor chairman to support creation of EV ecosystem in Indonesia

Hyundai Motor Group Chairman Chung Euisun, left, poses with Indonesian President Joko Widodo, by an Electrified G80 sedan during a ceremony at Jakarta International Expo in Jakarta, Monday, to celebrate Hyundai Motor's Genesis luxury brand sedan being chosen as an official escort car for the G20 Summit in Indonesia next year. Yonhap

Electrified G80 chosen as official vehicle for 2022 G20 summit in Indonesia

By Yi Whan-woo

Hyundai Motor Group Chairman Chung Eui-sun has pledged to join the Indonesian government's initiative to create an ecosystem for electric vehicles (EVs) in the Southeast Asian country during an event in Jakarta attended by Indonesian President Joko Widodo, Monday.

Calling Indonesia "a country of rich potential in renewable energy," Chung also underscored cooperation to create a hydrogen supply chain.

"We will make efforts to vitalize the EV ecosystem in Indonesia and participate in infrastructure development to help related industries grow as a future growth engine," Chung said in a congratulatory address at Jakarta International Expo.

"We will also work closely with Indonesia on production, transportation and other processes needed to create a hydrogen ecosystem," he added.

Both EVs and hydrogen fuel cell cars are considered future growth engines of Korea's No. 1 automotive group in its transition toward eco-friendly businesses.

On the sidelines of the event, Chung asked Widodo for support in the Korean automotive conglomerate's plan to expand its presence in Indonesia's EV market.

The event was also attended by executives of LG Energy Solution and POSCO, which are all participating in the environmentally-friendly project in Indonesia.

During the event, the EV version of Hyundai Motor's luxury Genesis brand was officially designated as an official escort car for the G20 summit to be held in Indonesia next year.

Hyundai Motor Group Chairman Chung Euisun, fourth from right, poses with other dignitaries during a ceremony at Jakarta International Expo in Jakarta, Monday, to celebrate the electrified G80 sedan being chosen as an official escort car for the G20 Summit in Indonesia next year. Yonhap

Hyundai Motor Group has been eyeing Indonesia as a strategic location to increase the production and sale of EVs as well as EV components in the 10-member ASEAN. Chung and Widodo accordingly met a couple of times, both in Korea and Indonesia.

The conglomerate's latest investment signed last month includes a joint project between its flagship affiliate, Hyundai Motor, and LG Energy Solution to build a $1.1 billion EV battery cell Karawang New Industry City near Jakarta.

Hyundai Motor is also about to complete the construction of a $1.55 billion EV plant in the Deltamas Industrial Complex, also near Jakarta.

This will be the Korean carmaker's first assembly plant being built in any Southeast Asian country.

The plant is estimated to be capable of making 250,000 cars, both combustion engine and lithium-ion battery-powered, per year.

Beginning in January 2022, the first batch of vehicles rolling off the production lines will be combustion-engine automobiles. Talks are underway between the Korean automaker and the Indonesian government to produce EVs possibly from March of the same year.

The companies have been setting up EV charging stations in Indonesia.

For Hyundai Motor Group, Indonesia has been determined the ideal spot for the conglomerate to push forward with its initiatives in the global EV market while increasing sales worldwide.

Indonesia accounts for 20 percent of the world's reserves of nickel, a key material used in lithium-ion batteries mounted on electric cars. The country is rich in manganese and cobalt, also major battery materials.

Aiming to become Southeast Asia's EV hub, Indonesia wants 20 percent of newly-sold cars to run on electricity by 2025.

This makes room for Korea's No. 1 automotive group to better compete with Japanese automakers that have dominated over 90 percent of Indonesia's automobile market for decades.

Indonesia is ASEAN's most populous nation and also its largest economy. The country's economy was anticipated to grow 6 percent until the COVID-19 pandemic erupted.

The country still has a low rate of car ownership in proportion to its population, with 86 cars per 1,000 people. It is forecast that car sales will increase exponentially when the economy recovers.

A 1,150 kilometer-long trans-highway connecting the east and west of Java, where more than half of Indonesia's population lives, is expected to open in coming years.

On bilateral relations, Korea and Indonesia signed a Comprehensive Economic Partnership Agreement (CEPA) in 2019. The deal allows zero tariffs on Korea's exports of cars and auto parts.

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