The additional funding will be channeled towards the construction of a battery manufacturing facility located in West Java. This plant is a collaborative venture between LG Energy Solution (LGES) and Hyundai Motor Group, operating under the name HLI Green Power.
This substantial investment boost comes despite a recent strategic shift by LGES. The company had previously decided to withdraw from a much larger US$8.46 billion electric vehicle (EV) battery supply chain project in Indonesia, citing unfavorable prevailing market conditions as the primary reason for the pullout.
The decision to significantly increase investment in this specific battery cell factory, even after stepping back from the broader supply chain initiative, suggests a focused approach by LG towards the Indonesian EV battery market. The joint venture with Hyundai Motor Group through HLI Green Power likely presents a more targeted and potentially more viable opportunity for LG to establish a strong foothold in the region's burgeoning EV ecosystem.
Minister Roeslani's announcement underscores Indonesia's growing importance as a key player in the global EV battery supply chain. The country possesses significant reserves of nickel, a crucial raw material for battery production, making it an attractive destination for battery manufacturers seeking to secure their supply lines and capitalize on the increasing demand for electric vehicles.
LG's increased investment signals continued confidence in Indonesia's long-term potential in this strategic sector, even amidst fluctuating market dynamics.