Indonesia and LG Energy Solution at Odds Over EV Battery Supply Chain Project
The Indonesian government and LG Energy Solution hold differing views on the continuation of the consortium project to build an integrated electric vehicle (EV) battery supply chain in Indonesia.
The project, originally valued at 11 trillion won or approximately US$7.7 billion, was undertaken by LG Energy Solution together with LG Chem, LX International Corp., and several other partners. Under the project, the South Korean consortium partnered with the Indonesian government and state-owned enterprises to build an end-to-end EV battery industry ecosystem, spanning raw material procurement, cathode precursor production, and battery cell manufacturing.
However, the ambitious project fell apart following LG Energy Solution's withdrawal from the consortium. As reported by Yonhap News Agency on Friday (18 April 2025), LG Energy Solution decided not to continue its involvement in the project due to changes in the global EV industry landscape. The phenomenon of the "EV chasm" — a slowdown in demand for electric vehicles in the global market — was cited as the primary reason for LG's withdrawal.
"Looking at current market conditions and the investment environment, we decided to exit the project," an LG Energy Solution executive told Yonhap.
The Indonesian government subsequently conveyed contradictory information. Investment and Downstream Industries Minister and head of the Investment Coordinating Board (BKPM) Rosan Roeslani denied that the LG Energy Solution consortium had cancelled the project. According to him, LG had completed the series of investments it undertook in Indonesia.
The investment series encompassed the mining ecosystem, nickel matte processing, nickel sulphate, precursors, cathodes, anodes, battery cells, cell packs, and battery recycling, with a total value reaching US$9.8 billion.
"So the news about them withdrawing — it wasn't a complete withdrawal, not at all. They [LG] have already carried out and completed GV number 4, valued at US$1.1 billion," said Rosan at a press conference, as quoted from the Presidential Secretariat's YouTube channel on Wednesday (23 April 2025).
Rosan noted that negotiating a major project such as LG's requires considerable time. However, the investment project has ultimately been taken over by another partner, though the commitment remains the same.
The project, originally valued at 11 trillion won or approximately US$7.7 billion, was undertaken by LG Energy Solution together with LG Chem, LX International Corp., and several other partners. Under the project, the South Korean consortium partnered with the Indonesian government and state-owned enterprises to build an end-to-end EV battery industry ecosystem, spanning raw material procurement, cathode precursor production, and battery cell manufacturing.
However, the ambitious project fell apart following LG Energy Solution's withdrawal from the consortium. As reported by Yonhap News Agency on Friday (18 April 2025), LG Energy Solution decided not to continue its involvement in the project due to changes in the global EV industry landscape. The phenomenon of the "EV chasm" — a slowdown in demand for electric vehicles in the global market — was cited as the primary reason for LG's withdrawal.
"Looking at current market conditions and the investment environment, we decided to exit the project," an LG Energy Solution executive told Yonhap.
The Indonesian government subsequently conveyed contradictory information. Investment and Downstream Industries Minister and head of the Investment Coordinating Board (BKPM) Rosan Roeslani denied that the LG Energy Solution consortium had cancelled the project. According to him, LG had completed the series of investments it undertook in Indonesia.
The investment series encompassed the mining ecosystem, nickel matte processing, nickel sulphate, precursors, cathodes, anodes, battery cells, cell packs, and battery recycling, with a total value reaching US$9.8 billion.
"So the news about them withdrawing — it wasn't a complete withdrawal, not at all. They [LG] have already carried out and completed GV number 4, valued at US$1.1 billion," said Rosan at a press conference, as quoted from the Presidential Secretariat's YouTube channel on Wednesday (23 April 2025).
Rosan noted that negotiating a major project such as LG's requires considerable time. However, the investment project has ultimately been taken over by another partner, though the commitment remains the same.