Minister Of Industry Agus Gumiwang Says Electric Car Prices Can Be Cheaper Because Of The Operation Of Hyundai-LG Battery Factory

JAKARTA - The Ministry of Industry (Kemenperin) revealed the potential cut in the price of electric cars this year. This is in line with the operation of Hyundai's EV battery factory and LG Energy Solution Ltd (LGES) in April 2024.

Minister of Industry (Menperin), Agus Gumiwang Kartasasmita said, local EV battery production can cut selling prices by 30%. This is because the electric car battery component consumes a large portion of production costs.

"If it has been produced domestically, I think there will be a 20-30 percent decrease in the price of EV cars," Agus said, quoted Monday, April 1.

Meanwhile, in terms of components, Agus said that the price of electric car batteries ranges from 40-50 percent of the total selling price of electric cars. No wonder considering that these components are still imported and subject to taxes so that they raise prices in the domestic market.

The presence of investment in electric car battery factories in the country is believed to make production costs more affordable. In fact, the level of domestic components (TKDN) will increase and investor interest can be higher.

"If we produce the battery, the domestic industry already produces the battery, later the first one is considered by our TKDN will be higher, God willing, it will attract investments," he said.

As is known, according to data from the Ministry of Investment/Investment Coordinating Agency, the realization of investment from Hyundai for the EV Battery Factory has reached IDR 21.7 trillion. In 2019, Hyundai Motor Company (HMC) announced its investment plan of 1.55 billion US dollars (IDR 21.8 trillion) in Indonesia.

The Minister of Investment, Bahlil Lahadalia, said that the Hyundai-LG partnership will inaugurate an installed battery factory with a capacity of 10 gigawatt hour (GWh) in April 2024. Factory development is even claimed to have entered the stage for the addition of 10 GWh.

Meanwhile, LG recently also showed their commitment to increase the installed capacity of EV batteries in Karawang by 20 gigawatt hour (GWh), from the current installed capacity at the level of 10 GWh.

"The first 10 GWh plant from Hyundai-LG will be inaugurated around April 2024, and already production. Now it has entered the construction of the second 10 GWh factory in a total of 20 GWh," said Bahlil some time ago.