Indonesia begins electric car production with Hyundai plant

South Korea's Hyundai has launched the first electric car assembly plant in Indonesia, as the Southeast Asian archipelago looks to exploit an abundance of resources used in EV production.

Indonesia is the world's largest nickel producer and also rich in cobalt, bauxite and copper ores, key materials in the manufacture of batteries for electric cars.

President Joko Widodo has said his government is aiming to establish an integrated EV "ecosystem" ranging from metals mining to battery production and car assembly.

The Hyundai factory will produce the firm's newest model the IONIQ 5, with an annual capacity of 250,000 vehicles.

"I hope Hyundai's IONIQ 5 will become an important milestone in the development of Indonesia's electric vehicle ecosystem," Widodo said during an inauguration ceremony Wednesday in the industrial township Cikarang, east of the capital Jakarta.

"Moving forward, electric vehicles should be the main mode of transportation," he added.

The country is targeting production of two million electric vehicles by 2025, both cars and motorcycles. The push to electric transportation is part of Indonesia's aim to achieve zero net emissions by 2060.

To aid the development of the industry the government has lifted import duties on EV parts.

"We have to be a key player in the global supply chain of the electric vehicle industry," Widodo said.

Hyundai said in a statement it would also build a network of charging stations and a battery production plant in collaboration with fellow South Korean electronics multinational LG.