The first EV battery cell plant
In mid-September, Indonesian President Joko Widodo visited the construction of the new battery plant in Karawang, West Java, Indonesia. This plant is expected to be the largest in Southeast Asia. It is being is built by a joint venture between LG Energy Solution and Hyundai and KIA Motor. The plant capacity is 10 GWh, which can produce 30 million battery cells annually, sufficient for the production of 180,000 EVs per year, and it will start commercial operation in early 2024.
The development of the battery plant was part of the development of EV manufacturing by Hyundai Motor Indonesia, which already started the production of the ICE vehicles, later on followed by the production of the EV cars. While there is another EV plant in Indonesia, constructed by Wuling, a joint venture that includes the General Motor Company, the Hyundai Plant has a higher profile because of its very ambitious plan to develop electric vehicles in the country. In the first half of 2023, Hyundai Indonesia had already exported more than 40,000 cars (ICE cars), placing it among the top five Indonesian auto exporters. The development of the new EV battery cell plant is a very important part of the government’s program to develop the entire eco-system of the Electric Vehicle industry.
In the meantime, Central Board of Statistics in Indonesia released its report on the balance of trade for August 2023, which registered another large surplus, much larger than that of the previous month. The August surplus stood at $3,124.4 million compared to the $1,291.9 million achieved in July. The total trade surplus for the first eight months of 2023 was $24,341.7 million, 30.3% lower than $34,893.4 million achieved in the same period of the previous year. That figure shows that while Indonesia's external trade position remains strong, the domestic economy has shown greater demand, evident in an increase in imports.
Exports in August reached $22,004.2 million while imports during the month reached $18,879.8 million. Cumulative exports from January-August 2023 reached $171,519.7 million while cumulative imports for the same period reached $159,678.2 million
The Central Board of Statistics also reported that the Consumer Price Index for the month of August registered deflation of 0.02%. With that monthly deflation, Y/Y inflation in August reached 3.27%. While higher than the previous month, the Y/Y inflation rate was still at a level in the upper part of the inflation corridor administered by the Central Bank. Against that background, Bank Indonesia kept the benchmark rate constant at 5.75% at its policy meeting held on September 20-21, 2023.
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