Azernews.Az

By Alimat Aliyeva

LG Energy Solution (LGES) has officially withdrawn from the 142 trillion rupiah ($8.45 billion) electric vehicle (EV) battery manufacturing project in Indonesia, the company announced on Monday. LG and the Indonesian government had signed a deal in late 2020 for the so-called Indonesia Grand Package (GP) project, which aimed to invest across the entire EV battery supply chain, Azernews reports.

"After carefully considering various factors, including market conditions and the investment environment, we have made the decision to formally withdraw from the Indonesia GP project," LGES stated in an announcement.

"However, we remain committed to exploring different avenues of collaboration with the Indonesian government, particularly with regard to the Indonesia battery joint venture, HLI Green Power," the company added. HLI Green Power is a joint venture led by LGES and Hyundai Motor Group. In 2024, the company inaugurated Indonesia’s first EV battery cell production plant, with an annual capacity of 10 gigawatt-hours of battery cells. There are also plans for an expansion during the second phase of investment.

Indonesia's investment ministry, along with state-owned companies Aneka Tambang and Indonesia Battery Corporation, which had planned to partner with LG on the project, did not immediately respond to requests for comment.

LG’s decision to withdraw could signal a shift in strategy as companies globally reassess their investments in response to market conditions, such as fluctuating raw material costs and changing EV demand. It’s possible LG may look for more flexible or localized solutions that offer greater long-term stability.