South Korea’s LG Energy Solution (LGES) has formally exited a multibillion-dollar electric vehicle battery investment project in Indonesia, the company said on Monday, citing shifting market conditions and investment considerations.
The move marks a withdrawal from the so-called Indonesia Grand Package (GP) agreement, a $8.45 billion plan signed in late 2020 to develop a full EV battery supply chain in the resource-rich Southeast Asian country.
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“Taking into account various factors, including market conditions and investment environment, we have agreed to formally withdraw from the Indonesia GP (Grand Package) project,” LGES said in a statement.
Despite the withdrawal, LGES emphasized that it remains committed to battery production in Indonesia through its existing joint venture with Hyundai Motor Group, known as HLI Green Power. “We will continue to explore various avenues of collaboration with the Indonesian government, centering on the Indonesia battery joint venture, HLI Green Power,” the company added.
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HLI Green Power, which inaugurated Indonesia’s first battery cell production facility last year, currently has an annual capacity of 10 gigawatt hours and is preparing for a second-phase expansion.
An Indonesian energy ministry official said the government will continue to seek new investors for the country’s growing EV battery industry, which is anchored by vast nickel reserves. “Even though LG has exited, Indonesia remains convinced our nickel is more competitive than other countries,” said Tri Winarno, an official at the Ministry of Energy and Mineral Resources.
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State-run miner Aneka Tambang, which had been expected to form a nickel mining joint venture with LGES, also reiterated its commitment to supporting the battery supply chain through new partnerships.