Government Terminated LG EV Battery Deal, Chinese Firm Huayou to Take Over
Investment and Downstream Minister/Head of the Investment Coordinating Board (BKPM) Rosan Perkasa Roeslani has spoken out regarding reports of the cancellation of an electric vehicle battery investment by a South Korean consortium led by LG. He claimed it was actually the government that terminated the agreement.
"Perhaps I should clarify — it was said earlier that they terminated the contract. To be more precise, it was we who terminated it, based on a letter dated 31 January 2025 issued by the Ministry of Energy and Mineral Resources (ESDM)," Rosan said at a press conference at the Presidential Office in Jakarta on Wednesday, 23 April 2025.
He explained that the cooperation contract was terminated because the government wanted the entire investment process to proceed more quickly. According to him, the EV ecosystem investment agreement with LG, referred to as the "grand package", had been under negotiation since 2020.
"The negotiations have gone on far too long, and we want everything to run well and quickly, because negotiations have been ongoing for five years. A project simply cannot drag on that long," Rosan said.
He further explained that to cancel the investment agreement with LG, the Indonesian government, through Energy and Mineral Resources Minister Bahlil Lahadalia, had sent a formal notification letter. Additionally, he noted that a Chinese replacement company had expressed interest in taking over the EV ecosystem grand package project in Indonesia.
"The letter was issued because Huayou was interested in investing, as they already possess the technology. They are simply replacing LG's position," said Rosan, who currently also serves as Chief Executive Officer of the Daya Anagata Nusantara Investment Management Agency (BPI Danantara).
Speaking separately, Bahlil stated that Huayou would be the company carrying out the EV battery investment project in Indonesia. Although the agreement with LG was cancelled, the project under Huayou would proceed unchanged according to the roadmap that had already been drawn up.
"In terms of concept, nothing has changed in the construction of this grand package. Infrastructure and production plans remain in line with the original roadmap. LG is no longer continuing and has been replaced by Huayou," Bahlil said in a written statement on Wednesday, 23 April 2025.
According to him, investor changes in mega-projects are commonplace. He urged the public and business community in Indonesia not to worry about LG's departure from the EV battery investment. Furthermore, he said the electric vehicle project in the country had already commenced and must proceed according to the original plan.
"Nothing has changed from the original objective, which is to make Indonesia the centre of the global electric vehicle industry," Bahlil said.
Huayou was founded in 1994 and is headquartered in Tongxiang, Zhejiang, China. The founder and Chairman of the Board of Directors of Huayou Holding Group is Chen Xuehua, whilst the position of Senior Vice President of Huayou Holding Group and President of Huayou Indonesia Nickel Industry Group is held by Gao Baojun.
"Perhaps I should clarify — it was said earlier that they terminated the contract. To be more precise, it was we who terminated it, based on a letter dated 31 January 2025 issued by the Ministry of Energy and Mineral Resources (ESDM)," Rosan said at a press conference at the Presidential Office in Jakarta on Wednesday, 23 April 2025.
He explained that the cooperation contract was terminated because the government wanted the entire investment process to proceed more quickly. According to him, the EV ecosystem investment agreement with LG, referred to as the "grand package", had been under negotiation since 2020.
"The negotiations have gone on far too long, and we want everything to run well and quickly, because negotiations have been ongoing for five years. A project simply cannot drag on that long," Rosan said.
He further explained that to cancel the investment agreement with LG, the Indonesian government, through Energy and Mineral Resources Minister Bahlil Lahadalia, had sent a formal notification letter. Additionally, he noted that a Chinese replacement company had expressed interest in taking over the EV ecosystem grand package project in Indonesia.
"The letter was issued because Huayou was interested in investing, as they already possess the technology. They are simply replacing LG's position," said Rosan, who currently also serves as Chief Executive Officer of the Daya Anagata Nusantara Investment Management Agency (BPI Danantara).
Speaking separately, Bahlil stated that Huayou would be the company carrying out the EV battery investment project in Indonesia. Although the agreement with LG was cancelled, the project under Huayou would proceed unchanged according to the roadmap that had already been drawn up.
"In terms of concept, nothing has changed in the construction of this grand package. Infrastructure and production plans remain in line with the original roadmap. LG is no longer continuing and has been replaced by Huayou," Bahlil said in a written statement on Wednesday, 23 April 2025.
According to him, investor changes in mega-projects are commonplace. He urged the public and business community in Indonesia not to worry about LG's departure from the EV battery investment. Furthermore, he said the electric vehicle project in the country had already commenced and must proceed according to the original plan.
"Nothing has changed from the original objective, which is to make Indonesia the centre of the global electric vehicle industry," Bahlil said.
Huayou was founded in 1994 and is headquartered in Tongxiang, Zhejiang, China. The founder and Chairman of the Board of Directors of Huayou Holding Group is Chen Xuehua, whilst the position of Senior Vice President of Huayou Holding Group and President of Huayou Indonesia Nickel Industry Group is held by Gao Baojun.