A South Korean consortium led by LG has decided to withdraw its $7.7 billion project to establish an electric vehicle (EV) battery supply chain in Indonesia. The consortium, which includes LG Energy Solution, LG Chem, LX International Corp., and other partners, had been collaborating with the Indonesian government and state-owned companies to create an "end-to-end value chain" for EV batteries.

The initiative aimed to cover the entire process from sourcing raw materials to producing precursors and cathode materials and manufacturing battery cells. Indonesia is the world’s largest producer of nickel, a key material for EV batteries.

EV Chasm and Global Market Shifts Lead to Project Withdrawal

The consortium’s decision to withdraw came after discussions with the Indonesian government, influenced by shifts in the industrial landscape. Specifically, the so-called “EV chasm” refers to a temporary slowdown or plateau in global EV demand.

"Considering market conditions and the investment environment, we have decided to exit the project," said an official from LG Energy Solution.

LG to Continue Other Business Operations in Indonesia

Despite withdrawing from the EV battery supply chain project, LG Energy Solution will continue with its other existing business operations in Indonesia, including the Hyundai LG Indonesia Green Power (HLI Green Power) battery plant, a joint venture with Hyundai Motor Group.

"However, we will continue our existing business in Indonesia, such as the HLI Green Power battery plant," the official from LG Energy Solution stated.

PHOTO: LG INDONESIA

This article was created with AI assistance.