Indonesia to keep EV battery goal after LG-led JV's ‘very significant' exit
China is strengthening its hold on
Indonesia 's
electric vehicle battery sector after a South Korean consortium led by LG announced its exit from a US$7.7 billion project to build a full EV battery supply chain in the Southeast Asian country.
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LG's move – seen by analysts as a blow to Indonesia's aspirations to become a regional batteries hub – has prompted Beijing-backed Zhejiang Huayou Cobalt to step in as the project's new leader.
South Korea's LG Energy Solution confirmed on Monday that its consortium, which included LG Chem and LX International, had pulled out of the so-called Grand Package project, citing 'market conditions and investment environment' as key factors. The consortium signed a memorandum of understanding with Jakarta in December 2020 to develop an ecosystem spanning operations from raw materials mining and processing to battery production.
On Wednesday, Indonesia's Minister of Energy and Mineral Resources Bahlil Lahadalia announced that Huayou Cobalt would replace LG Energy Solution in the project, also known as Project Titan. Despite the swap, Bahlil insisted Indonesia would stick to the project's road map.
'Conceptually, the development of the Grand Package has not changed. The infrastructure and production plan remain in accordance with the initial road map. LG is no longer involved and has been replaced by Huayou,' Bahlil said in a statement.
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Changes in investors in grand-scale projects are 'normal', according to Bahlil. 'Nothing has changed from the initial goal, which is to make Indonesia the world's hub for the electric vehicle industry,' he added.
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