April 23, 2025 | 05:53 pm
TEMPO.CO, Jakarta - Minister of Energy and Mineral Resources Bahlil Lahadalia commented on LG Energy Solution's withdrawal from the electric vehicle (EV) project in Indonesia.
According to Bahlil, the departure of the South Korean company will be replaced by a new investment partner from China.
“Conceptually, the development of this Grand Package remains unchanged. The infrastructure and production plans will continue as per the initial roadmap. LG will no longer be involved and will be replaced by Huayou,” Bahlil stated in a written statement on Wednesday, April 23, 2025.
According to the official Huayou Indonesia website, the company is headquartered in Tongxiang, Zhejiang.
Huayou is involved in research, development, and manufacturing of lithium-ion battery materials and cobalt materials, which are typically used for electronics and electric vehicles.
Bahlil emphasized that changing investors is common in large-scale projects. He reassured the public and business players in Indonesia not to worry about LG Energy Solution’s exit from the EV investment.
Moreover, Bahlil noted that Indonesia’s electric vehicle project has already begun production and should continue as initially planned.
“The original goal remains unchanged, which is to make Indonesia the global hub for the electric vehicle industry,” said the former Investment Minister.
According to South Korea’s Yonhap News Agency, the South Korean consortium led by LG announced on Friday, April 18, 2025, that it would cancel its electric vehicle battery supply chain project in Indonesia.
The project, valued at 11 trillion won or US$7.7 billion (approximately Rp129 trillion, with an exchange rate of Rp16,841 per U.S. dollar), was planned to involve the entire process from raw material procurement to the manufacturing of precursors, cathode materials, and battery cells.
Indonesia is known as the world’s largest producer of nickel, the main raw material for electric vehicle batteries.
An executive from LG Energy Solution explained that the decision to withdraw was made after consulting with the Indonesian government. The official mentioned that the cancellation was due to shifts in the industry landscape, particularly a temporary slowdown in global demand, referred to as the “electric vehicle gap.”
“Considering market conditions and the investment environment, we have decided to exit the project,” said the LG Energy Solution official.
However, the executive added that LG Energy Solution would continue its operations in Indonesia, including the Hyundai LG Indonesia Green Power (HLI Green Power) battery factory, a joint venture with Hyundai Motor Group.
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