Hyundai Motor plans to launch production of electric vehicles (EVs) at a new plant in Indonesia by 2022, according to local reports citing a senior company official.

The carmaker is currently building a new 150,000 units a year assembly plant in Cikarang in the Indonesian province of West Java which is scheduled to begin operations at the end of 2021.

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Speaking at the 2020 West Java Investment Summit in Bandung, Hyundai Motor Asia Pacific vice president and chief operations officer Lee Kang Hyun, told reporters "with the support of Indonesian ministries and the local West Java government the factory is 65% complete, despite the COVID-19 pandemic".  

The plant, which will ultimately have a production capacity of 250,000 vehicles per year once the planned US$1.55bn investment programme is complete, will be Hyundai's first full scale manufacturing hub in southeast Asia and will also export within the region.

To encourage local production of electric vehicles, the Indonesian government has been discussing EV battery manufacturing investment with leading South Korean and Chinese manufacturers such as LG Chem and Contemporary Amperex Technology Company Limited (CATL). The country has an abundance of raw materials for lithium ion batteries, including vast reserves of nickel.

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Last month the Indonesian government said it had ordered three leading state owned enterprises to establish a joint holding company, to be called PT Indonesia Battery Holding, to drive the development of a local electric vehicle (EV) battery manufacturing and service industry.

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The government is targeting 20% of total vehicle production in the country to comprise electric and hybrid vehicles by 2025, including 20% of the targeted 1m vehicle exports, rising to over 25% by 2030.