Indonesian officials announced on April 23 that China’s Zhejiang Huayou Cobalt will replace South Korea’s LG Energy Solutions as the new investor in a major electric vehicle battery production project. According to reports from AFP, LG Energy had signed an agreement with the Indonesian government at the end of 2020, which was part of a package worth 142 trillion Indonesian rupiah (approximately 11 billion SGD) aimed at developing the entire electric vehicle battery supply chain.
This week, citing market conditions and the investment environment, LG Energy decided to withdraw from the project. Indonesian Minister of Energy and Mineral Resources, Arifin Tasrif, stated that LG Energy's exit would not have a significant impact on the project. "It's just a change in investors; LG will no longer continue… instead, we have a strategic partner from China, Huayou," he said. "The initial goal remains unchanged: to make Indonesia a hub for the global electric vehicle industry."
Additionally, Indonesia, which possesses the world's largest nickel reserves, aims to attract investments and become a key player in the global electric vehicle supply chain. Investment Minister Bahlil Lahadalia mentioned that negotiations with LG Energy had taken a long time, which led the Indonesian government to decide against furthering the project with the company. He added that Huayou's familiarity with Indonesia was one of the reasons the government chose to appoint them as LG Energy's successor. "Huayou has already invested in Indonesia and has the resources to develop future industries," he noted.
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