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April 19, 2022

LGES to invest in EV battery supply chain in Indonesia

LGES leading a consortium.

LG Energy Solution (LGES) has signed a preliminary agreement with Indonesian state run companies to establish an electric vehicle (EV) battery supply chain in the country, according to local reports.

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South Korea’s top EV battery manufacturer said it was leading a consortium which included LG Chem, LX International and other companies to establish the US$9bn integrated EV battery project.

The reports, citing an unnamed LGES official, suggested an initial, non binding agreement had been signed with Indonesian state owned EV battery investment company PT Industri Baterai Indonesia and also state owned gold and nickel mining company PT Aneka Tambang.

It cames just days after China’s Contemporary Amperex Technology (CATL), the world’s largest EV battery manufacturer, said it had signed a similar agreement with the same local state-owned companies to also establish a US$6bn integrated EV battery supply chain project – which has been reported separately by Just Auto.

Global battery manufacturers are under mounting pressure to secure input materials after a year of soaring prices, as they scale up battery production to fulfil growing global demand for EVs.

The LGES executive was quoted as saying: “The project seeks to establish an end to end value chain for EV batteries, including the procurement of raw materials, production of key components such as precursors and cathode materials and ultimately the manufacturing of battery cells.”

While Indonesia still has a negligible internal market for EVs, the government has a policy of requiring companies to establish local raw material processing and manufacturing operations.

Like CATL, LGES is keen to tap into substantial reserves of nickel ore in Indonesia to support its growing global EV battery manufacturing. The company official added: “With this project we expect to be able to enhance our battery business capabilities and profitability by stably securing competitive raw materials.”

Free Report
img

What does the future hold for the US electric vehicles market?

The US Electric Vehicles (EV) market has established itself as one to watch. Despite China maintaining the number one spot, the US holds significant standing as one of the major EV markets, with GlobalData’s whitepaper identifying a strong growth trajectory within the forecast period. This report further analyzes the trends, market drivers, and government incentives set to influence and facilitate the market.   This report also looks beyond the US and touches on environmental concerns set to drive the EV market worldwide.   Want to find out more? This report demonstrates GlobalData Explorer’s sector analysis capabilities, showing how you can:  
  • Get historical and forecast market sizing data, with country specific insight for 22+ of the world’s largest industries
  • Track sector dealmaking activity, to view aggregate volumes, specific deals and top investors for all major deal types in M&A, Capital Raising, and Partnerships
  • Analyze news from GlobalData Explorer’s News Database – enable screening and alerts by industry, company, geography and news sentiment for filtered insight
  • Identify and track the key disruptive trends that are keeping the top digital thought leaders talking through social media analytics
  Consult this report now to find out how you and your company can benefit from our Explorer platform.
by GlobalData
Enter your details here to receive your free Report.

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