Huayou to Immediately Build EV Battery Factory After Receiving Presidential Approval

KatadataOTO – President Prabowo has approved the Huayou consortium to replace LG in the electric vehicle battery project. Thus, the US$9.8 billion battery downstreaming project will continue.

The president's approval is expected to accelerate the development process of EV batteries and create more job opportunities.

“It has been decided by the president, and under his direction, the Huayou consortium has now been established, so it is hoped there will be no more problems. In fact, it is now ready for groundbreaking,” said Bahlil Lahadalia, Minister of Energy and Mineral Resources (ESDM), as reported by Antara (23/05).

He also revealed that in the project's ownership structure, state-owned enterprises (BUMN) will be the majority shareholders.

Photo : Courtesy

Meanwhile, for the next joint venture (JV), the state-owned enterprises' share portion is currently only 30 percent. However, the government has been trying to increase it because the Danantara Investment Management Agency (BPI) will also participate.

“We are currently working to increase it because Danantara will also participate. The president's directive is to maximize government ownership to be above 40 - 50 percent, but all of that is in the negotiation process," Bahlil later said.

It was previously reported that the government officially replaced LG with Huayou to build the EV battery project named the Indonesia Grand Package. The value is a staggering USD 9.8 billion or Rp 165.5 trillion.

However, Huayou will only need to cover the remaining investment of US$8.6 billion or Rp 145.2 trillion. This is because US$1.2 billion or Rp 20.2 trillion of the project has already been realized, so they only need to continue what is already in place.

Photo : Wuling

In this project, the entire production process for electric car batteries, from raw material supply to finished goods manufacturing, will be carried out domestically. Therefore, it is not impossible that the local content level (TKDN) for EVs will be even greater in the future.

The presence of this facility is also expected to make Indonesia a significant producer of electric vehicles. Moreover, the development of EVs in the country is still positive, even though the automotive industry is under pressure.