LG Energy Solution's Battery System

Jan 09, 2024

The Indonesian government has reaffirmed its commitment to the $9.8 billion electric vehicle (EV) battery manufacturing project led by LG Energy Solution Ltd., a South Korean company. The Minister of Investment in Indonesia, Bahlil Lahadalia, expressed his readiness to support the LG-led consortium during a meeting with the CEO of LG Energy Solution, Kwon Young Soo. The Indonesian ambassador to South Korea, Gandi Sulistiyanto, was also present at the meeting.

In late 2019, LG Energy Solution signed a memorandum of understanding with two Indonesian government-owned companies, Antam and Indonesia Battery Corp., to establish EV battery cell production facilities in the Karawang International Industrial City in east Jakarta. The project, which involves the mining and processing of battery raw materials, as well as battery cell production and recycling, has faced delays due to the US Inflation Reduction Act implemented in 2022. This act requires a certain percentage of EV battery materials to be sourced from North America or its trading partners to qualify for tax credits.

Despite the challenges, the Indonesian investment minister expressed gratitude for LG’s dedication to keeping the project on track. The ministry is committed to helping the LG-led consortium obtain the necessary approvals from relevant authorities. The consortium comprises LG Chem Ltd., LX International Corp., POSCO Future M Co., China’s Huayou, Antam, and Indonesia Battery. LG Energy Solution’s Kwon stated that the consortium members could obtain approval from their boards of directors to commence the project this year.

The EV battery cell plant, expected to have an annual capacity of 10 gigawatt-hours, is projected to begin commercial production in April 2024. The project aims to bolster the EV battery industry in Indonesia and contribute to the country’s electrification efforts.