South Korea’s LG Energy Solution has officially withdrawn from a 142 trillion rupiah ($8.45 billion) project aimed at developing electric vehicle (EV) battery manufacturing in Indonesia, the company announced on Monday. The withdrawal pertains to the Indonesia Grand Package project, which LG Energy Solution and the Indonesian government initiated in late 2020 to invest across the EV battery supply chain in the Southeast Asian nation.
In a statement, LG Energy Solution explained that the decision to exit the project was based on various factors, including current market conditions and the investment environment in Indonesia. Despite this withdrawal, the company expressed its intention to continue exploring other collaboration opportunities with the Indonesian government, particularly focusing on the Indonesia battery joint venture, HLI Green Power.
HLI Green Power, a joint venture led by LG Energy Solution and Hyundai Motor Group, launched Indonesia’s first battery cell production plant last year, which has an annual capacity of 10 gigawatt hours. The joint venture plans to expand this capacity in a second phase of investment, aiming to meet the growing demand for EV batteries.
Tri Winarno, an official from Indonesia’s energy ministry, stated that the country will persist in seeking foreign investors to partner with local companies to advance the battery industry, leveraging Indonesia’s abundant nickel reserves. He emphasized that despite LG Energy Solution’s exit, Indonesia remains confident in the competitiveness of its nickel resources compared to other countries.
Aneka Tambang, an Indonesian state-controlled mining company that had intended to form a joint venture with LG Energy Solution for nickel mining, reaffirmed its commitment to collaborating with other companies to supply nickel for battery production. However, Indonesia Battery Corporation, another state-owned enterprise that was set to partner with LG Energy Solution, did not respond to requests for comment.
This development highlights the evolving landscape of the global EV battery market, where companies continually assess and adapt their investment strategies based on shifting economic and market dynamics. Indonesia, with its significant nickel reserves, remains a key player in the battery supply chain, attracting interest from various international investors despite recent setbacks.
Source: Reuters
