JAKARTA: China's Zhejiang Huayou Cobalt is replacing South Korea's LG Energy Solution as a strategic investor in a multibillion-dollar project to build an electric vehicle battery joint venture in Indonesia, officials said on Wednesday (April 23).
The South Korean company, which was part of a consortium that signed a 142 trillion rupiah ($8.4 billion) "Grand Project" in 2020, announced its withdrawal from the project this week, citing factors including market conditions and the investment environment.
Energy and Mineral Resources Minister Bahlil Lahadalia said LG Energy Solution's decision would not significantly affect the project, which aims to establish a local electric vehicle battery value chain in Indonesia.
"Changes only occur at the investor level, where LG no longer continue its involvement... and has been replaced by a strategic partner from China, namely Huayou," Bahlil said in a statement.
"Nothing has changed from the initial goal, namely making Indonesia as the center of the world's electric vehicle industry."
Indonesia, home to the world's largest nickel reserve, has been seeking to position itself as a key player in the global electric vehicle supply chain by leveraging its vast reserve of the critical mineral to attract investments.
The government decided not to move forward with the South Korean company in the project due to the long negotiation process with the firm to realise its investment, Investment Minister Rosan Roeslani said.
Rosan cited Huayou's familiarity with Indonesia as one of the reasons why the government chose the company to succeed LG Energy Solution.
"Huayou had invested in Indonesia," Rosan said.
"They have sources to develop the industry going forward."
LG Energy Solution said in a statement on Tuesday that it will continue to explore "various avenues of collaboration" with the Indonesian government, including in its battery joint venture.
HLI Green Power, a joint venture between LG Energy Solution and Hyundai Motor Group, operates Indonesia's first electric vehicle battery plant, which was launched in 2024 with a production capacity of up to 10 Gigawatt hours (GWh) of cells annually. - AFP
