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Hyundai Motor and LG Chem have announced they will build a battery plant for EVs in Indonesia. The investment of $1.1 billion will be shared equally. The plant will mass produce batteries in Indonesia, which has the world’s largest reserves of nickel, and supply them to Hyundai Motor and Kia’s complete vehicle plants around the world. The new plant will be established on a 330,000 square meter site in an industrial park in the Karawang region, about 65 kilometers southeast of central Jakarta. Construction will begin by the end of this year and mass production will begin in 2024.
The plant will have an annual production capacity of 10 gigawatt-hours, enough to supply batteries for 150,000 EVs. Hyundai and Kia have a plan to launch a total of 23 new EV models in the next five years. In order to expand the range to include sedans, SUVs, and the Genesis luxury brand, stable procurement of batteries, a key component, has been an issue. The company’s first joint venture plant will lead to a long-term shift to EVs.
In Southeast Asia, where the delta variant of the COVID-19 is spreading rapidly, business activities are becoming stagnant. In response to government regulations and the rapid increase in the number of infected people, major Japanese companies such as Toyota and Panasonic have suspended production at some of their plants. In addition to the decline in local sales, the disruption of the supply chain has also affected production in Japan.
Toyota has sequentially shut down all three of its plants in Thailand since July 20. The company has not yet decided when to resume operations because it has been unable to procure parts due to an outbreak of infection at one of its customers’ plants. Honda also shut down one of its plants in Thailand from August 3 to 5.
Over 2,000 employees at Honda Motor have applied for early retirement, as the Japanese automaker restructures its workforce to gear up to make more electric vehicles.
Honda’s move is the latest in the trend among automakers to move away from the production and sales of internal combustion engines. Those employees account for around 5% of Honda’s full-time staff in Japan. Although Honda had not set a target, the number of applications has far exceeded its initial estimate of 1,000.
The battle between major Japanese and Chinese construction machinery companies is intensifying in Indonesia. As the growth of the Chinese market slows, China’s Sanichi Heavy Industries is accelerating its overseas expansion in search of new sources of revenue.
Komatsu, which has a stronghold in Southeast Asia, is responding by introducing mid-priced machines and expanding its maintenance bases. Who will dominate the growing market following China will also affect the power structure of the construction equipment market in Asia.
South Korean automotive battery giants are moving into the U.S. market, with SK Innovation teaming up with Ford and LG Chemical with GM to promote the construction of an automotive battery plant. SK plans to invest about 300 billion yen in the plant to produce 22 gigawatt-hours of automotive batteries, enough to power 220,000 EVs a year, and in a joint venture with Ford, the two companies will invest 600 billion yen to build a giant 60-gigawatt plant.
SK’s annual production capacity as of 2019 is only 5 gigabytes at its Korean plant. The capacity is expected to increase to 30 gigawatts in 2020 with the launch of plants in China and Hungary, to 85 gigawatts in 2023 with the addition of the US plant, and to exceed 185 gigawatts in 2025 with the addition of the joint venture with Ford. SK, a late entrant to the market, ranks sixth with a 5% share of the global market in 2020.
On July 1, Komatsu launched EARTHBRAIN, a new company for the digital transformation (DX) of construction sites. The new company will provide services that will lead to significant cost improvements by digitizing and analyzing data from construction sites.
The parent company of the new company is LandLog, an IoT (Internet of Things) open platform company established by Komatsu in 2017. The investors will be substantially replaced, and some members of Komatsu’s digital unit will be transferred to the new company.
After approval by overseas authorities, Komatsu will provide 54.5%, NTT DoCoMo 35.5%, and Sony Semiconductor Solutions and Nomura Research Institute (NRI) 5% each. The company is well capitalized with more than 15 billion yen. Newly added to the list are Sony and NRI. Sony has an advantage in image sensors. NRI will provide its expertise in developing digitalization solutions.
China’s Great Wall Motor (GWM) has announced the official opening of a plant in Thailand. The company acquired the plant from General Motors (GM) in 2020 and has been working to make it smarter by installing advanced AI-based equipment. It is the company’s first smart factory to be opened in Southeast Asia. The amount of investment for the renovation has not been disclosed, but the company has indicated that it plans to invest 22.6 billion baht (about 79 billion yen) in Thailand.
The production capacity is 80,000 units per year, and it is expected to produce HVs first. In the future, the plant will also produce EVs. The company plans to allocate 60% of the vehicles produced to the Thai domestic market and 40% for export to neighboring countries in Southeast Asia and Australia.
South Korea’s SK Group has announced plans to build a 140,000 square meter hydrogen fuel base in Ulsan. A liquid hydrogen production plant will be built, and a hydrogen-fueled power plant will also be constructed.
With the participation of Lotte Chemical, the project aims to promote the accumulation of hydrogen-related industries in the city. SK Gas will be the main proponent of the project. The company plans to invest 2.2 trillion won (about 216 billion yen) over the next five years to build infrastructure for the generation, storage, and transportation of hydrogen energy in anticipation of its widespread use, and has also announced plans to build 100 hydrogen filling stations in South Korea by 2030.
Komatsu has announced that it plans to develop an electric excavator in cooperation with Honda and bring the product to the market during FY2021. The two companies will also jointly develop electric excavators up to the 1-ton class and will also collaborate on services such as battery replacement for construction equipment.
PSR Analysis: As mentioned in the April issue of PowerTALK™ News, four Japanese motorcycle manufacturers, Honda, Yamaha, Suzuki and Kawasaki, have agreed to share the same battery specifications for electric motorcycles. The joint development announced this time will benefit from Honda’s knowledge from its extensive battery research. The interchangeable type has the advantage of shortening the waiting time for recharging, which is an advantage for construction equipment. Japan’s small construction equipment is highly regarded worldwide, and Komatsu must be looking to expand overseas. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
Doosan Heavy Industries & Construction (DHIC) announced on May 6 that it has signed a memorandum of understanding (MOU) with Libotec, which has a continuous pyrolysis technology for waste plastics, to develop hydrogen production technology using waste plastics.
Libotec will produce gas from waste plastic through continuous pyrolysis, while Doosan Heavy Industries will be in charge of developing equipment to reform the pyrolyzed gas into hydrogen and building the plant. Doosan Heavy Industries has developed a hydrogen reformer capable of producing about 300 kilograms of hydrogen per day, which will be installed and operated at Libotec’s plant. The company plans to conduct demonstrations and commercialize a technology that can produce more than three tons of hydrogen per day from waste plastic.
