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South Korea’s Hyundai Motor Group and LG Energy Solution said on Thursday they would set up a joint venture (JV) in Indonesia to establish a battery cell plant for electric vehicles (EV), investing $1.1 billion with each owning half the business.
LG Energy Solution (LGES), the wholly owned battery subsidiary of LG Chem Ltd(051910.KS), and Hyundai signed a memorandum of understanding with the Indonesian government to build the plant in the country, the companies said in a joint statement on Thursday.
The news comes as global automakers move to secure EV batteries in anticipation of a rise in sales because of government subsidies and quotas worldwide seeking to cut carbon emissions.
Indonesia is promoting the domestic development of EV and battery production to create a downstream industry for the country’s rich supply of lithium battery ingredient, nickel laterite ore.