Government Terminated LG's Electric Vehicle Investment Contract, Replaced by China's Huayou
TEMPO.CO, Jakarta - Minister of Investment and Downstreaming/Head of the Investment Coordinating Board (BKPM) Rosan Roeslani stated that LG's departure from Indonesia's electric vehicle (EV) investment project was because the government terminated the contract with them. "To be more precise, it was us who terminated it," said Rosan during an online press conference via YouTube on Wednesday, 23 April 2025.
In this project, LG led a South Korean consortium comprising LG Energy Solution, LG Chem, LX International Corp, and other partners. The consortium had originally agreed to a cooperation agreement with the Indonesian government and state-owned enterprises (SOEs).
Rosan said the contract termination was set out in a letter issued by the Ministry of Energy and Mineral Resources (ESDM) on 31 January 2025. The letter, Rosan said, was sent by Energy and Mineral Resources Minister Bahlil Lahadalia to the CEOs of LG Chem and LG Energy Solution.
Rosan explained that the contract was terminated due to protracted negotiations. "We want everything to proceed well and quickly, as negotiations had already been going on for five years," he said.
Beyond the drawn-out negotiations, Rosan said that Chinese company Huayou had simultaneously expressed interest in investing in the project, having shown interest in the Titan Project since 2024. "They already have the technology and they are simply replacing LG's position," said Rosan.
He noted this was not Huayou's first investment in Indonesia. Huayou, Rosan said, had also been involved in a similar project for EV battery procurement that was originally held by LG Energy Solution.
Rosan also confirmed he had met with Huayou representatives and received a positive response. "Why Huayou? Well, they have invested before, and even far more substantially."
Rosan said Huayou had in fact already been part of the joint venture (JV) originally led by LG. "They (Huayou) are now leading the consortium, that's all," said Rosan.
The LG-led EV battery supply chain project in Indonesia was planned to encompass the entire process from raw material procurement to the production of precursors, cathode materials, and battery cell manufacturing.
Energy and Mineral Resources Minister Bahlil Lahadalia confirmed the government would continue the project without LG's involvement. "LG is no longer continuing its involvement in the new JV 1, 2, 3. They have been replaced by a strategic partner from China, namely Huayou," said the former Investment Minister.
The EV investment previously agreed between the Indonesian government and LG Energy Solution amounted to funding of up to US$9.8 billion. The agreement was signed on 18 December 2020 and had been considered to be progressing according to plan. The project encompasses the development of the EV battery supply chain, from mining through to battery production.
In this project, LG led a South Korean consortium comprising LG Energy Solution, LG Chem, LX International Corp, and other partners. The consortium had originally agreed to a cooperation agreement with the Indonesian government and state-owned enterprises (SOEs).
Rosan said the contract termination was set out in a letter issued by the Ministry of Energy and Mineral Resources (ESDM) on 31 January 2025. The letter, Rosan said, was sent by Energy and Mineral Resources Minister Bahlil Lahadalia to the CEOs of LG Chem and LG Energy Solution.
Rosan explained that the contract was terminated due to protracted negotiations. "We want everything to proceed well and quickly, as negotiations had already been going on for five years," he said.
Beyond the drawn-out negotiations, Rosan said that Chinese company Huayou had simultaneously expressed interest in investing in the project, having shown interest in the Titan Project since 2024. "They already have the technology and they are simply replacing LG's position," said Rosan.
He noted this was not Huayou's first investment in Indonesia. Huayou, Rosan said, had also been involved in a similar project for EV battery procurement that was originally held by LG Energy Solution.
Rosan also confirmed he had met with Huayou representatives and received a positive response. "Why Huayou? Well, they have invested before, and even far more substantially."
Rosan said Huayou had in fact already been part of the joint venture (JV) originally led by LG. "They (Huayou) are now leading the consortium, that's all," said Rosan.
The LG-led EV battery supply chain project in Indonesia was planned to encompass the entire process from raw material procurement to the production of precursors, cathode materials, and battery cell manufacturing.
Energy and Mineral Resources Minister Bahlil Lahadalia confirmed the government would continue the project without LG's involvement. "LG is no longer continuing its involvement in the new JV 1, 2, 3. They have been replaced by a strategic partner from China, namely Huayou," said the former Investment Minister.
The EV investment previously agreed between the Indonesian government and LG Energy Solution amounted to funding of up to US$9.8 billion. The agreement was signed on 18 December 2020 and had been considered to be progressing according to plan. The project encompasses the development of the EV battery supply chain, from mining through to battery production.