LG Energy Solution has withdrawn from an electric vehicle battery manufacturing project in Indonesia valued at 142 trillion rupiah, or approximately $8.45 billion.
This decision marks a significant shift in the Indonesia Grand Package initiative, which was established through a partnership between LGES and the Indonesian government in 2020. The project had initially aimed to foster investment across the entire electric vehicle battery supply chain in Indonesia, positioning the country as a key player in the global EV market.
LGES cited a range of reasons behind the withdrawal, including current market conditions and the overall investment climate. The company stated that after considering these various factors, both parties agreed to formally terminate LGES’s involvement in the Grand Package project. Despite the setback, LGES emphasized its continued interest in working with Indonesia, particularly through its existing joint venture, HLI Green Power.
HLI Green Power, a collaborative venture between LGES and Hyundai Motor Group, remains active and central to LGES’s ongoing presence in Indonesia. Last year, the joint venture achieved a significant milestone by inaugurating Indonesia’s first EV battery cell production plant. The facility currently boasts an annual production capacity of 10 gigawatt hours of battery cells, and plans are underway to increase this capacity as part of a second phase of investment. This plant represents a foundational step in building Indonesia’s domestic EV infrastructure and signals LGES’s commitment to maintaining a strategic role in the country’s clean energy transition.
While LGES continues to explore opportunities for collaboration, the withdrawal from the broader Grand Package project introduces uncertainty regarding the scale and scope of Indonesia’s ambitions to become a major hub for EV battery production, Reuters news report said.
Key stakeholders in the project, including Indonesia’s investment ministry, as well as state-owned firms Aneka Tambang and Indonesia Battery Corporation, had been expected to partner with LGES but have not yet issued responses to the latest development. The exit of such a prominent global battery manufacturer could prompt a reevaluation of investment strategies and partnerships within Indonesia’s growing electric vehicle sector.
GreentechLead.com News Desk