Indonesia ends LG deal after long negotiation impasse: minister

The Indonesian government has removed LG Energy Solution (LGES) from its US$9.8 billion electric vehicle (EV) battery development consortium, Project Titan.

The decision, announced by Rosan Roeslani, Indonesia’s Minister of Investment and Downstreaming, was made by the Ministry of Energy and Mineral Resources (ESDM) on January 31, 2025, following unproductive negotiations.

Rosan noted that negotiations with LGES had stalled for five years.

This prompted the government to seek more efficient progress.

🔗 Source: Katadata

🧠 Food for thought

1️⃣ Indonesia’s strategic pivot in EV batteries reshapes global supply chains

Indonesia’s move to replace LGES with Huayou in the $9.8 billion Titan Project reflects a deliberate strategy to accelerate development of its EV battery industry after five years of stalled negotiations.

This decision comes amid Indonesia’s broader push to leverage its position as the world’s largest nickel producer, with the government setting ambitious targets for 20% of vehicles sold to be electric by 2025 1.

The shift demonstrates Indonesia’s pragmatic approach to industrial development, maintaining concurrent partnerships with Korean firms (through the completed $1.1 billion LGES-Hyundai project) while expanding cooperation with Chinese manufacturers who can deliver results more quickly.

Huayou’s selection isn’t coincidental, as the company has already demonstrated its capabilities in Indonesia through its Huaneng project focusing on high-nickel battery precursor materials, establishing credibility with Indonesian authorities 2.

This strategic balancing act between Korean and Chinese partners allows Indonesia to access diverse technologies and markets while reducing dependency on any single foreign partner.

2️⃣ The global EV battery market undergoes significant consolidation and competition

The replacement of LGES with Huayou occurs against a backdrop of intense competition in the global battery market, where industry dynamics have shifted dramatically in recent years.

CATL has increased its global market share to 37.4%, while LG Energy Solution holds 14.5%, illustrating the growing competitive pressure on Korean manufacturers from their Chinese counterparts 3.

This competitive landscape has contributed to remarkable growth in the EV battery market, which expanded from $26 billion in 2021 to approximately $132.6 billion in 2023 4.