Indonesia’s $8 Billion EV Battery Project Stays on Track as China's Huayou Replaces LG

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JAKARTA, investortrust.id — Indonesia has reaffirmed its commitment to a landmark electric vehicle battery investment project, worth $8 billion, despite the exit of South Korean firm LG Energy Solution. Chinese battery materials giant Huayou Cobalt has stepped in as the new investor, ensuring the continuity of one of the country’s most strategic industrial undertakings.

The announcement comes following LG’s decision to withdraw from the project it initially signed with the Indonesian government on Friday, Dec. 18, 2020. The project, which is part of the national “Indonesia Grand Package,” spans the entire EV battery supply chain—from mining to cell production. According to Energy and Mineral Resources Minister Bahlil Lahadalia, the shift in partnership does not disrupt the project's structure or timeline.

“This project remains on track. What we have is simply a change in investment partners, not a cancellation,” said Bahlil in a press briefing on Wednesday, April 23, 2025.

Under the updated joint venture arrangement, Huayou will replace LG in three key segments of the project. The new structure also includes continued involvement from Indonesia Battery Corporation, a state-owned entity created to spearhead the country’s EV ambitions.

“The Grand Package remains intact in terms of concept, infrastructure, and roadmap. LG’s exit only affects JV 1, 2, and 3, all of which are now taken over by Huayou in collaboration with IBC,” Bahlil explained.

The minister also addressed public concerns about geopolitical instability and economic volatility, assuring that the project is insulated from such risks. Groundbreaking for the next development phase is scheduled for later this year.

“This investment, worth nearly $8 billion, will proceed as planned. There's no halting or scaling back of the project,” he emphasized.

South Korea’s LG-led consortium—which included LG Chem, LX International Corp, and others—previously partnered with Indonesia and several state enterprises to develop an integrated battery supply chain. Their decision to withdraw, as reported by South Korean news agency Yonhap, followed internal reviews and market adjustments due to weakening global EV demand and shifting industry dynamics.

“Considering current market conditions and the investment climate, we have opted to exit the project,” an LG Energy Solution official said.

Nevertheless, LG remains active in Indonesia through other ventures. It continues its partnership with Hyundai Motor Group via HLI Green Power, a battery cell joint venture. This entity launched Indonesia’s first EV battery cell plant last year, with a production capacity of 10 gigawatt hours annually, and has plans to expand.

Indonesia, home to the world’s largest nickel reserves—a critical material for EV batteries—has prioritized downstream industrialization and value-added exports through projects like this. According to Bahlil, changes in investor composition are normal in long-term, capital-intensive ventures, and the government’s role is to ensure smooth transitions and continued execution.

“What matters is that all stakeholders remain committed. Some parts of the project are already operational, and we will continue to monitor the rest until completion,” he concluded.