LG Cancels Investment, Opening Opportunities for Indonesia to Partner with Other Countries

KatadataOTO –  A surprising decision was made by the South Korean consortium led by LG. They canceled the investment to build a battery factory for electric cars in Indonesia.

However, this move is believed not to have a significant impact on the development of the EV (Electric Vehicle) ecosystem here.

“Yes, of course, LG's decision does not slow down our acceleration in promoting the development of a supply chain that benefits the ecosystem in Indonesia,” said Erick Thohir, Minister of State-Owned Enterprises, as quoted by Antara, on Tuesday (22/04).

According to Erick, this is because the collaboration to build the electric car battery ecosystem with Volkswagen, CBL China, and Ford is still ongoing.

Photo: Carscoops

Therefore, LG's decision to leave the country will not have a negative impact on the development of EVs.

“The land that South Korea was previously interested in, we can now offer to other parties,” he continued.

Erick even mentioned that there are several potential countries for collaboration. These include Saudi Arabia, Qatar, the United Arab Emirates, Japan, and the United States.

“We are certainly wide open to collaboration with the United States, especially since there are ongoing discussions about the Indonesia-US trade relationship,” said Erick Thohir.

Then, one of President Prabowo Subianto's ministers explained that LG's departure opens up many opportunities.

As a reminder, the South Korean consortium led by LG has decided to withdraw from a project valued at 11 trillion won or Rp 130.7 trillion.

The aforementioned funds were planned to be used to build the domestic EV battery supply chain.

The consortium includes LG Energy Solution, LG Chem, LX International Corp, and other partners.

They were collaborating with the Indonesian government and several state-owned enterprises to build the electric car battery supply chain.

However, they noted changes in the industrial landscape, especially the slowdown in global EV demand.

Photo: Carscoops

"Considering the market conditions and investment environment, we have decided to withdraw from the project," said an official from LG Energy Solution, as quoted by Antara (22/04).

Nevertheless, they are continuing with several existing businesses in Indonesia. For example, the Hyundai LG Indonesia Green Power (HLI Green Power) battery factory.