Indonesia's Danantara to join Huayou, CATL projects

Energy and Mineral Resources Minister Bahlil Lahadalia announced that President Prabowo Subianto approved a US$9.8 billion battery downstream project now led by Huayou.

Danantara, a state-backed investment firm, has also joined the project to support funding and operations.

He said that LG’s exit was a strategic decision aimed at expediting progress through Huayou’s involvement.

Additionally, Bahlil highlighted a US$6 billion collaboration with CATL, known as the Dragon Project.

This initiative encompasses various stages, from mining to battery recycling, and is managed by PT Industri Baterai Indonesia (IBC) and CATL subsidiary Ningbo Contemporary Brunp Legend Co Ltd (CBL).

The Minister of Investment and Downstreaming/Head of BKPM, who is also the Head of BPI Danantara, Rosan Roeslani, highlighted the importance of Danantara’s involvement in strengthening Indonesia’s position in the project.

🔗 Source: Kontan

🧠 Food for thought

1️⃣ Indonesia’s strategic pivot to Chinese battery champions reflects global EV industry realignment

Indonesia’s transition from South Korean LG to Chinese Huayou for its $9.8 billion battery project represents a broader shift in global EV supply chains dominated increasingly by Chinese firms.

China currently produces nearly two-thirds of the world’s electric vehicles and over three-quarters of EV batteries, demonstrating its market dominance1.

The replacement of LG with Huayou in the major “Titan Project” coincides with Huayou’s ambitious plans to invest an additional $20 billion in Indonesia’s EV ecosystem, bringing its total commitment to $28.8 billion2.

This pivot is further reinforced by Indonesia’s parallel “Dragon Project” with CATL, China’s battery giant, creating a two-pronged strategy with Chinese manufacturers at the center.

The influx of Chinese investment provides Indonesia with immediate access to advanced battery technology, as Chinese companies have made significant breakthroughs in battery chemistry, particularly with cost-effective lithium-iron-phosphate (LFP) batteries1.

Indonesia’s strategy aligns with market realities where Chinese battery manufacturers have established technological leadership and scale advantages that few competitors can match.