Hyundai To Build A New Plant For EVs In Indonesia As Part Of $880 Million Investment

Hyundai will start building electric vehicles in Indonesia as part of an $880 million investment in the country, Reuters reports.

According to Indonesia deputy minister for industry Airlangga Hartarto, the Hyundai factory will have an annual production capacity of about 250,000 units. The minister also revealed that current plans call for 47 per cent of the vehicles manufactured to be sold in the local market and 53 per cent to be exported, largely to Southeast Asia and Australia.

The site will be Hyundai’s first car factory in Southeast Asia and help the South Korean automaker cut its reliance on China, where sales have been hurt by diplomatic tensions between the two countries.

One contributing factor in Hyundai choosing Indonesia as the location for an electric vehicle factory is that the nation has large reserves of nickel laterite ore, a key ingredient needed for the production of lithium-ion batteries.

Despite Hyundai’s strong presence in dozens of markets around the world, Hyundai has struggled to crack into Southeast Asia. In Indonesia, for example, it sold just 1372 vehicles between January and October this year. In comparison, Toyota sold 463,565 units in the same time period.

Hyundai’s latest $880 million investment in Southeast Asia comes shortly after the company announced a huge $250 million investment in popular local ride-hailing company Grab.