LG Energy Solution Withdraws from Indonesian EV Battery Project

JAKARTA: LG Energy Solution (LGES) of South Korea has officially pulled out of a 142 trillion rupiah ($8.45 billion) initiative focused on the development of electric vehicle (EV) battery manufacturing in Indonesia, the company announced on Monday.

In late 2020, LGES and the Indonesian government formalized an agreement concerning the ‘Indonesia Grand Package’ project. This encompassed investments across the entire EV battery supply chain within the Southeast Asian nation.

LGES stated, ‘After considering various aspects, such as market dynamics and the investment landscape, we have mutually decided to formally withdraw from the Indonesia GP project.’

The company further clarified, ‘Nevertheless, we will continue to explore diverse collaborative opportunities with the Indonesian government, with a primary focus on the Indonesia battery joint venture, HLI Green Power.’

HLI Green Power, a joint venture spearheaded by LGES and Hyundai Motor Group, inaugurated Indonesia’s inaugural battery cell production facility last year. The plant boasts an annual production capacity of 10 gigawatt hours and has further expansion plans for its second investment phase.

An energy ministry official, Tri Winarno, commented that Indonesia will press on with its pursuit of overseas investors to forge alliances with domestic firms to advance the battery sector, capitalizing on the nation’s extensive nickel deposits.

He told reporters, ‘Even with LG’s departure, Indonesia remains confident that our nickel resources offer a competitive edge compared to other nations.’

State-controlled miner Aneka Tambang, which had intended to establish a joint venture with LGES for nickel mining, affirmed its dedication to partnering with other entities to provide nickel for battery manufacturing.

Indonesia Battery Corporation, another state-owned firm that had planned to collaborate with LGES, has not yet provided a response to requests for comments.