Four Facts About Electric Battery Factory Project In Karawang

JAKARTA - The Indonesian government announced its ambition to become an important player in the global vehicle supply chain at the end of 2019. The dream will soon be realized, Indonesia will soon have a battery factory for electric vehicles (EV). The factory is located in Karawang, West Java.

Here are four facts about the electric battery factory project:

1. Commercially operational by 2030

The Minister of Investment/Head of BKPM Bahlil Lahadalia said that currently construction or construction is underway and is targeted for completion in September 2022. The battery factory, located in Karawang, West Java, will operate commercially in 2023.

In the first phase, the realization of this investment began with the construction of a US$1.1 billion electric vehicle battery factory in Karawang with a capacity of 10 Gigawatt Hours (GWh). This development also involves national entrepreneurs in the regions and MSMEs.

"Because the 10 Giga battery will finish construction in September 2022, and start production in 2023, God willing", he said in a virtual press conference, Friday, September 17.

Furthermore, Bahlil said, the electric car battery factory is part of the investment plan of the South Korean company LG of US$ 9.8 billion or around IDR 142 trillion.

"The plan is to build a cathode factory with a battery precursor of US$ 9.8 billion. The 10 GW capacity was originally intended to build 30 GW, 10 GW in the first stage, then 20 GW cathode precursors", he said.

2. China and Europe are interested in investing

Bahlil said there are six to seven foreign companies that will invest in electric battery projects in the country. Currently, these countries are still negotiating with the government. Therefore, Bahlil denied that only South Korea was invited to cooperate.

"So this is about 6-7 countries that will enter Indonesia (for investment in the electric battery industry project). So it's not true that only Korea. No country can regulate Indonesia, no. So we provide a fair investment space", he said.

Furthermore, Bahlil revealed that several investors came from Europe, China, and one country in Southeast Asia. However, he said, currently only China has signed.

The company from China in question is Contemporary Amperex Technology Co. Ltd. (CATL). The company has signed an investment contract in 2020 and will realize it this year.

"The temporary development of the CATL process, pray God willing, this year the groundbreaking has started", he said.

Meanwhile, for one of the countries in Southeast Asia, said Bahlil, it is targeted to sign an investment contract in October 2021. Unfortunately, Bahlil was reluctant to reveal the identity of the investor.

"Maybe I'll sign it in October, then I'll announce it. We at the Investment Ministry have a rule when it's signed, it's announced. At least it's believed to be true, then we'll announce it. We don't want to announce it half-heartedly", he explained.

3. Many neighboring countries are jealous of Indonesia

Bahlil Lahadalia revealed that many countries are jealous and want to prevent Indonesia from becoming a world battery producer. Therefore, he said, the government needed to act quickly to start the early stages of developing the electric battery industry in the country.

Furthermore, Bahlil admitted that he had read the signs of neighboring countries that did not want Indonesia to advance in the electric car battery industry. Bahlil said, these countries only want to take raw batteries from Indonesia.

"We realize that our neighboring countries do not want Indonesia to become one of the battery-producing countries in the world. They want to take raw materials from us, but make them in their country so that it is made in country A, made in country B. We read this sign", he said.

As is known, three main raw materials are needed for the manufacture of batteries, namely nickel, lithium, and cobalt. For a nickel, Indonesia controls 30 percent of the world's total. Compared to several other countries, Indonesia's advantage is that it has nickel laterite.

But unfortunately, Bahlil did not specifically mention which countries want to thwart Indonesia's steps to become the world's electric car battery producer. Even so, Bahlil emphasized that Indonesia is the first country in Southeast Asia to have an electric battery factory.

"This is the first time in Indonesia, in Southeast Asia. For the world, if you have built an ecosystem, one of the first in the world. This will already be built-in 2022", he said.

4. Involve thousands of workers

Bahlil said that the electric battery industrial factory project in Karawang, West Java will absorb 1,100 direct workers. In the construction process, the electric vehicle battery factory which will be managed by PT HKML Battery Indonesia is estimated to absorb 10 thousand to 13 thousand workers.

"When the factory is finished, the workforce immediately reaches 1,100 people", he said.

Not only that said Bahlil, but this project is also safe to absorb indirect workers ranging from subcontractors, MSMEs, food, materials to heavy equipment.

"Starting yesterday, they started working right away. The cut and field are already running. There are already around 50 units of tools. (If you count), drivers with helpers alone have reached more than 100 people", he said.

Previously, President Joko Widodo (Jokowi) inaugurated the groundbreaking or laying of the first stone for an electric car battery factory in Karawang, West Java. He said that Indonesia provided support in the form of easy permits and legal certainty for the development of the downstream industry.

For your information, the project is the realization of an investment by the LG and Hyundai consortium consisting of the Hyundai Motor Company, KIA Corporation, Hyundai Mobis, and LG Energy Solution.

"By saying bismillahirrahmanirrahim, I declare that the groundbreaking of the PT HKML Battery Indonesia Electric Vehicle Battery Industry Factory has begun", said Jokowi, during a groundbreaking activity for the electric vehicle battery industry in Karawang, West Java, Wednesday, September 15.

The previous electric car battery development project was marked by a memorandum of understanding or MoU between the Ministry of investment and a consortium of Hyundai and LG in December 2020.

Later, the consortium from South Korea will partner with Indonesia Battery Corporation, which consists of PT Indonesia Asahan Aluminum (Inalum), PT Aneka Tambang Tbk (ANTM), PT Pertamina, PT Perusahaan Listrik Negara, and Contemporary Amperex Technology Co. Ltd.