Indonesia-South Korea Inaugurate Battery and Electric Vehicle Ecosystem in Karawang

Karawang, INTI - To meet the global demand for electric vehicles where lithium batteries are at the core of this transformation, the Indonesian and South Korean governments inaugurated the Battery and Electric Vehicle Ecosystem in Karawang on Tuesday (3/7). The inauguration was attended by Coordinating Minister for Maritime Affairs and Investment, Luhut B. Pandjaitan, accompanying the President of the Republic of Indonesia, Joko Widodo.

"By leveraging our rich natural resources and investing in cutting-edge technology, Indonesia is ready to become a key player in the global supply chain for electric vehicles, from upstream to downstream, with an integrated ecosystem involving international stakeholders. This strategic move will not only boost our economy but also create thousands of jobs, spur innovation, and enhance the skills of our workforce," said Minister Luhut in his speech.

Transformation and Economic Growth

Minister Luhut continued that this is a vision becoming a reality, as proof of Indonesia's commitment to innovation, environmental management, job creation, and economic growth. "Today marks an important milestone in Indonesia's journey towards sustainable development and technological advancement with the inauguration of the lithium battery and electric vehicle ecosystem in Indonesia," added Minister Luhut.

Indonesia has a target of 600 thousand Battery Electric Vehicle (BEV) production capacity by 2030. The production of 50 thousand units of Kona Electric per year will significantly add to Indonesia's production capacity. This production is estimated to reduce CO2 emissions by about 160 thousand tons per year, reduce fuel imports by 45 million liters per year, and save fuel subsidies up to 131 billion rupiahs per year, which will increase as the number of vehicles on the road grows.

Moreover, the use of domestically produced LG batteries in Kona Electric can raise the Local Content Requirement (TKDN) of Battery Electric Vehicles (KBLBB) from initially 40 percent to nearly 80 percent. This is a first step to encourage the added value of the domestic industry.

Dedication to Emission Reduction and Quality of Life Improvement

"The establishment of the lithium battery and electric vehicle industry ecosystem not only positions Indonesia as a leader in this region but also underscores our dedication to reducing carbon emissions, improving air quality, and enhancing the quality of life of our citizens," concluded Minister Luhut.

The inauguration event was attended by the Minister of Trade, Industry, and Energy of the Republic of Korea, the Korean Ambassador to Indonesia, the Executive Chair of Hyundai Motor Group, the Executive President of LG Energy Solution, the Minister of State-Owned Enterprises, the Minister of Investment, the Acting Governor of West Java, the Head of the Presidential Staff Office, and other officials.

According to the latest data from the Ministry of Industry, the electric vehicle sector is expected to contribute more than 2% to Indonesia's GDP by 2030. Investments from South Korea are also estimated to reach more than USD 1 billion, creating over 10 thousand new jobs in various sectors, including manufacturing, research and development, and support services.

Data from the Central Bureau of Statistics (BPS) shows that Indonesia imports 500 million liters of fuel per year. With the increase in production and use of electric vehicles, Indonesia can reduce its dependence on fuel imports, positively impacting the trade balance and national energy security.