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Your next electric car might be more Australian than you think! New factories in South East Asia, rather than China, will boost burgeoning Aussie lithium battery industry: Hyundai

Why Hyundai says its new South East Asian factories will see more Australian lithium return to our shores in cars and buses.

Australia is sitting on a stockpile of lithium reserves, which Hyundai says should mean a burgeoning local battery industry, enabled by a plethora of car manufacturing plants popping up throughout South East Asia.

Speaking to CarsGuide at the Everything Electric show in Sydney, Hyundai's Senior Manager of Future Mobility, Scott Nargar, explained the brand's stance on sourcing batteries and vehicles for the foreseeable future in light of its sister company Kia's decision to build Australian-delivered EV5s in China.

"Hyundai will stick with SK Innovation and LG [for battery manufacturing], but certainly in Australia we're talking with industry and to governments about the resources here in Australia. We've invested heavily into other countries like Indonesia, where [minister for Industry and Science] Ed Husic has been up signing bilateral agreements with the government for battery manufacturing and critical minerals," Nargar said.

"We're looking to foster more of that in Australia, all the lithium is already here. How can we create more jobs here and manufacture components and batteries here and then have them come back in cars from our factories throughout Asia?

"There's the new factory in Indonesia. There's now the most advanced autonomous factory in the world in Singapore, which will exclusively build electric vehicles, and the world's largest factories in South Korea."

Hyundai's Indonesian assets are twofold. The first is a factory in Cikarang opened in 2022, which is currently building the Ioniq 5 (for the first time outside Korea) alongside the lower-cost Creta small SUV which is not sold in Australia. The plant has a capacity of up to 150,000 units a year, with the option to expand to 250,000 units with further investment, while the second is a plant Hyundai is invested in with LG's Energy Solution battery division for the construction of battery packs outside of South Korea at a more competitive price-point.

Hyundai Australia says it doesn't currently have plans to manufacture vehicles in China alongside its sister brand, Kia

Interestingly, Hyundai says the plant will also produce the new Santa Fe and a next-generation MPV at the plant in the future.

"As we continue to build these factories outside of Korea which are EV-only, as volume begins to grow in Australia, we might need to look at sourcing vehicles from elsewhere to help meet that demand," Nargar said.

There's more too, with Nargar saying local bus manufacturers stand to benefit from next-gen Hyundai heavy-vehicle technology on the way, able to be purchased in a variety of formats.

Hyundai's new plant in Indonesia will be capable of high volumes and potentially lower battery costs

"What we're certainly doing is talking to all the bus manufacturers in Australia because we can bring in a rolling chassis with electric or hydrogen fuel-cell drivetrains, just the drivetrains, or even just the batteries," Nargar said.

"The battery we use for buses is just the Ioniq 5 battery - it's about using those same parts over and over again. A fuel-cell bus might have one or two of these and the electric version might have four or five, depending on the use case and duty cycle."

"We're having those conversations with Custom Denning, Volgren, Precision BusTech – all great local companies. Let's keep bus manufacturing here and we're happy to support that with our drivetrain technology."

Hyundai's new Singapore facility is highly automated and designed to build EVs with the smallest possible footprint

In 2021, Australia was producing some 50 per cent of the world's lithium, primarily exporting it to China. Locally, the ability to refine lithium and turn it into a battery is limited, while China is said to control some 60 percent of the world's global refining capacity. Refined ‘battery-grade' lithium is then sent to battery manufacturers throughout the world who assemble it into cells appropriate for automotive uses.

Australian lithium then returns here to be sold in the battery packs in BMW, Tesla, and VW Group vehicles as well as Hyundai among others. Don't expect a return to full-scale local manufacturing from rocks to cars, though, as a limited scale of the domestic market, high assembly costs and high shipping costS for export conspire to make a future version of a brand like Ford and Holden unlikely.

Tom White
Senior Journalist
Despite studying ancient history and law at university, it makes sense Tom ended up writing about cars, as he spent the majority of his waking hours finding ways to drive...
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