The plant with a total production capacity of 250,000 vehicles per year marks the start of production of battery electric vehicles in Southeast Asia's largest economy.

The new IONIQ 5 model from the South Korean manufacturer will be assembled there for the Indonesian market and for export to the region.

Indonesia, the largest nickel producer in the world, has begun to set up a chain ranging from the extraction of nickel and other metals necessary for this technology, to the manufacture of batteries, to electric vehicles.

Indonesian President Joko Widodo said he hopes the model will be "an important milestone in the development of the electric vehicle ecosystem in Indonesia", at the inauguration of the factory on Wednesday in Cikarang, east of the capital. Jakarta.

"In the future, electric vehicles are expected to become the main mode of transportation, especially in Indonesia's future capital Nusantara," he said in a statement.

The archipelago is aiming for two million electric vehicles, motorcycles and cars, on its roads by 2025.

The government has initiated reforms recently, such as the removal of import duties on automotive components, to become globally competitive in the sector.

“We must become a key player in the supply chain for electric vehicles,” said Joko Widodo.

Hyundai has also pledged to contribute to the developing country's electric mobility ecosystem with charging stations and a battery factory in collaboration with LG, according to a separate statement.

© 2022 AFP