LG Cancels $8.4 Billion Battery Supply Chain Investment in Indonesia
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JAKARTA, investortrust.id – A South Korean consortium led by LG has cancelled a major investment plan to build an electric vehicle battery supply chain in Indonesia, a decision that reflects mounting concerns over a global slowdown in EV demand and a shifting industry landscape.
The project, valued at $8.4 billion aimed to develop a full value chain—from raw material procurement to cathode production and cell manufacturing. The consortium included LG Energy Solution, LG Chem, LX International Corp, and other partners, and had been working closely with the Indonesian government and several state-owned enterprises.
According to Yonhap News Agency, a source familiar with the matter said the consortium decided to exit the project after extensive consultations with Indonesian authorities, citing a less favorable investment climate and declining demand for electric vehicles worldwide.
“Considering market conditions and the investment environment, we have decided to withdraw from the project,” said a spokesperson from LG Energy Solution.
Indonesia is the world’s largest producer of nickel, a critical component in lithium-ion EV batteries. The government had hoped the partnership with LG would boost its ambitions to become a key player in the global EV supply chain which also provides a much needed boost for President Prabowo Subianto's 8% economic growth target. The cancellation of this project represents a setback to those plans.
Indonesian investment authorities and state-owned partners, including Aneka Tambang and Indonesia Battery Corporation, have not yet commented on the development
Despite the cancellation, LG confirmed that it remains committed to existing operations in Indonesia. This includes the Hyundai LG Indonesia Green Power (HLI Green Power) plant—a joint venture with Hyundai Motor Group—which last year inaugurated Indonesia’s first EV battery cell factory. The facility currently has an annual production capacity of 10 gigawatt-hours, with plans to expand in a second investment phase.