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Korea, Indonesia join forces to build EV ecosystem

March 24, 2023 - 17:57 By Kan Hyeong-woo
Indonesian government officials and South Korean business representatives discuss ways to enhance the electric vehicle ecosystem in Indonesia at a business forum co-hosted by Herald Corp. in Seoul on Friday. From left: Muhsin Syihab, adviser to minister for foreign affairs on inter-institutional relations-Indonesia, Lee Young-tack, executive vice president at Hyundai Motor Co., Gandi Sulistiyanto, Indonesian ambassador to the Republic of Korea, Muhammad Rachmat Kaimuddin, deputy coordinating minister at the Indonesian Ministry of Infrastructure and Transportation, Nurul Ichwan, deputy minister at the Indonesian Ministry of Investment and Park Tae-sung, executive vice president of the Korea Battery Industry Association (Lee Sang-sub/The Korea Herald)

Government officials and business leaders from South Korea and Indonesia on Friday underscored combined efforts to expand the electric vehicle ecosystem in the Southeast Asian country at a business forum marking the 50th anniversary of bilateral ties.

“The collaboration is very important because you (Korea) have very good technology on the lithium battery. By 2027, we are hopefully going to be the largest lithium battery producer globally,” said Luhut Binsar Pandjaitan, coordinating minister of maritime affairs and investment of Indonesia, during the forum held at a Seoul hotel.

According to the Indonesian government, the country has decided to offer tax reductions of up to 11 percent for those who purchase EVs. Indonesia’s population is estimated at 280 million and approximately 1 million vehicles are sold in the country each year.

Lee Young-tack, executive vice president at Hyundai Motor Group in charge of the auto giant’s Asia-Pacific region, stressed the Korean auto giant’s strong will to join the Indonesian government’s green push.

“In step with the Indonesian government’s direction of the mid- to long-term eco-friendly and energy policies, Hyundai Motor is putting efforts across all sectors of the EV ecosystem to support the Indonesian EV industry,” said Lee.

The Hyundai Motor executive pointed out that the automaker is setting up infrastructure for the local production and assembly of batteries. The company is constructing a battery cell plant and a battery pack plant in Bekasi, to the east of the capital Jakarta, with plans to start production at the new plants as early as next year.

Referring to Hyundai’s Ioniq 5, Gandi Sulistiyanto, Indonesian ambassador to Korea, said “I should be encouraging him (Lee) to produce more because the demand is so high in Indonesia. If people think about EVs in Indonesia, they think about Hyundai.”

Hyundai is the largest EV maker in Indonesia, with the bestselling Ioniq 5 being produced at its local plant there. After selling 2,500 EVs last year, the carmaker aims to bolster its EV sales to 10,000 units this year, further widening the gap with global rivals such as Tesla and Lexus.

Erick Thohir, Indonesia’s minister of state-owned enterprises, said in an Instagram post Thursday that he had met with Hyundai Motor Group Executive Chair Chung Euisun to discuss the development of the EV ecosystem in Indonesia. According to the Indonesian official, the two talked about cooperation for building 100 Hyundai EVs that feature interior designs with the traditional Indonesian dyeing technique called "batik."

Park Tae-sung, executive vice president of the Korea Battery Industry Association and former South Korean ambassador to Indonesia, called for the need for a Korea-Indonesia battery forum to further explore ways to work together.

Herald Corp., publisher of The Korea Herald and Herald Business, co-hosted the business forum together with the Embassy of the Republic of Indonesia in Seoul and the Indonesia Investment Procurement Center in Seoul. Some 300 Indonesian and Korean government officials and Korean business representatives attended the event.