Hyundai and LG Chem are reportedly considering setting up an electric vehicle (EV) battery manufacturing joint venture in Indonesia, Reuters reports. The details of the venture, including the size of the investment have however not been decided, according to a person familiar with the matter.

The report indicated that LG Group chairman Koo Kwang-mo met Hyundai Motor Group executive vice-chairman Euisun Chung met earlier this week to discuss cooperation in EV batteries, including future technology.

Both companies confirmed that they have met, but said nothing had been decided concerning a potential venture. “Hyundai Motor Group is collaborating with LG Chem on various projects. However, no concrete discussion has been made on a battery joint venture in Indonesia,” Hyundai said in a statement to the news organisation.

Such a move would be in line with future proofing the business. Automakers are moving to secure batteries in anticipation of a rise in EV sales, the potential increase brought about by government subsidies and quotas designed to cut carbon emissions.

Venturing into battery cell production would be a first for Hyundai, which is attempting to challenge the dominance of Toyota in Southeast Asia. In 2018, it outlined plans to invest US$880 million (RM3.76 billion) in Indonesia to build a manufacturing plant and work towards producing EVs in the country. Last year, it announced that the size of the investment would be increased to US$1.55 billion (RM6.63 billion).

Analysts however believe that there’s still a way to go on this front, saying that while Indonesia is committed to promoting the EV industry, the country is not yet ready with charging infrastructure or consumer purchasing power. As such, a battery JV is likely to be a longer-term plan.