South Korean Consortium Led by LG Cancels $7.7 Billion EV Battery Supply Chain Project in Indonesia

Jakarta – A South Korean consortium led by LG announced on Friday (April 18, 2025) that it is withdrawing from its electric vehicle (EV) battery supply chain project in Indonesia. The project was valued at 11 trillion won, or approximately USD 7.7 billion (roughly IDR 129 trillion at an exchange rate of IDR 16,841 per dollar).

According to Yonhap News Agency, the consortium included LG Energy Solution, LG Chem, LX International Corp, and other affiliated companies. These firms had previously partnered with the Indonesian government and state-owned enterprises to establish a fully integrated EV battery supply chain.

The ambitious project aimed to cover every stage of battery production—from raw material procurement to precursor and cathode material production, and ultimately to battery cell manufacturing. As the world’s largest producer of nickel, Indonesia holds a crucial role in the EV battery industry.

An executive from LG Energy Solution stated the withdrawal was made following discussions with the Indonesian government. The decision was attributed to shifts in the global industry landscape, particularly due to the so-called “EV valley,” referring to a temporary global slowdown in EV demand.

“Considering the market situation and investment environment, we’ve decided to exit the project,” the executive said.

However, LG confirmed its continued operations in Indonesia through other ventures, particularly the Hyundai LG Indonesia Green Power (HLI Green Power) battery plant.

The HLI Green Power plant in Karawang, West Java, was inaugurated by President Joko Widodo on July 3, 2024. It is recognized as the first and largest EV battery cell facility in Southeast Asia, with a total investment of USD 3.1 billion (approximately IDR 45.88 trillion), integrated within the “Indonesia Grand Package”.

The facility was developed in two phases: the first, launched in April 2024, cost USD 1.1 billion and has a capacity of 10 GWh. The second phase began construction in January 2024 and entered commercial production in March 2025 with a 20 GWh capacity.

PT HLI Green Power is a joint venture between Hyundai Motor Company, LG Energy Solution, and Indonesia Battery Corporation (IBC), established following an MoU signed with Indonesia’s Ministry of Investment/BKPM on July 28, 2021.