Posted on 31 Jul 2023
South Korean automaker Hyundai has disclosed it plans to produce electric vehicle battery packs in Indonesia starting from the summer of 2024, Kallanish learns from the recording of a recent business forum celebrating 50 years of Indonesia-Korea Relations.
Lee Young-tack, president of the Association of Southeast Asian Nations (ASEAN) Headquarters at Hyundai Motor Group, said: "Hyundai Energy Indonesia will be producing battery packs from July 2024 using cells made by Hyundai Motor Group and LG Energy Solution’s joint battery manufacturing plant. A month later, the packs will be put into EVs produced in Indonesia."
The locally produced EV battery packs are expected to be used on Hyundai's Ioniq 5 and other models to help the company benefit more from tax incentives as Lee added: "It will allow us to be the only automaker eligible for tax incentives, including exemption on the 15 percent luxury tax.”
He said the localisation of battery pack production will help Hyundai to boost local EV production volume by 40%-60% in Indonesia.
The Indonesian government has reduced its value-added tax by ten percentage points to 1% only. In addition, it allows exemptions on the 15% luxury tax if over 40% of the manufacturing process of EVs is carried out locally.
Lee also suggested possibilities of exporting to Thailand once the production in Indonesia starts in order to benefit from Thailand's incentive policies as well.
In a recent nickel industry meeting, Luhut Binsar Panjaitan, coordinating minister for maritime affair of Indonesia, indicated the country will further update the incentive policies but so far no official detail has been released yet.
Battery pack manufacturing JV Hyundai Energy Indonesia was formed by Hyundai Motor Group and the automotive parts branch Hyundai Mobis.
Source:Kallanish
