South Korea’s LG Group has decided to withdraw from a KRW 11 trillion (US$ 7.7 billion) project to establish an electric vehicle (EV) battery materials supply chain in Indonesia, according to reports citing a company source.
LG Group’s EV battery manufacturer, LG Energy Solution Company, and its chemicals unit, LG Chem Company, have decided to pull out of the consortium they were leading due to the continued weakness in global battery electric vehicle (BEV) demand and growing uncertainty regarding international trade following the recent import tariff hikes in the US.
The consortium, dubbed the “Titan Project", also includes LX International Corporation – a South Korean mining and commodities trading company, and the Indonesia Battery Corporation (IBC).
The aim of the project was to develop an "end-to-end value chain" for EV batteries, from raw materials mining to the production of precursors, cathode materials and battery cell manufacture. Indonesia has among the largest reserves of nickel, a key mineral used in EV batteries.
An unnamed official of LG Energy Solution told reporters: "In view of the current market conditions and investment environment, we have decided to exit the project.”
The company confirmed that it will continue with its existing business in Indonesia, which includes the Hyundai LG Indonesia Green Power (HLI Green Power) EV battery plant – a joint venture with Hyundai Motor Group located in West Java which became operational last year.
The deputy chairman of the Indonesian Energy, Mineral, and Coal Suppliers Association (Aspebindo), Fathul Nugroho, voiced his disappointment at the withdrawal of LG from the project, saying it will likely delay Indonesia's goal of becoming a major production hub for electric vehicle (EV) batteries. He pointed out that the Titan project was expected to become the “backbone” of Indonesia’s battery ecosystem development, adding that “losing the opportunity for technology transfer in this high-value sector will likely increase Indonesia’s dependence on imports.”
