LG Group increases investment in ID battery plant by $1.7b

South Korea’s LG Group will increase its investment in a battery cell factory in Indonesia by US$1.7 billion, raising the total investment to US$2.8 billion.

Indonesia’s Investment Minister, Rosan Roeslani, announced the development during a press conference on April 29.

The additional funds will support the construction of a battery plant in West Java, a joint venture between LG Energy Solution (LGES) and Hyundai Motor Group, operating as HLI Green Power.

This announcement follows LGES’s decision to withdraw from a larger US$8.46 billion EV battery supply chain project in Indonesia due to unfavorable market conditions.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Shifting investment dynamics in Indonesia’s EV battery sector

LG’s approach demonstrates a strategic recalibration in EV battery investments in Indonesia, reflecting broader market uncertainties.

While increasing investment in the HLI Green Power joint venture with Hyundai by $1.7 billion to $2.8 billion total, LG simultaneously withdrew from a larger $7.7 billion comprehensive battery ecosystem project 1.

This selective investment strategy mirrors global EV market cooling trends, with LG choosing to focus on established partnerships rather than more speculative ventures in the complete battery supply chain.

Chinese battery manufacturers are stepping in where South Korean firms step back, as evidenced by Huayou Cobalt replacing LG in the abandoned project while maintaining the same production timeline and investment scale 2.

The Indonesian battery market is still projected to grow from $266.55 million in 2025 to $520 million by 2030 at a CAGR of 14.3%, suggesting long-term potential despite short-term market adjustments 3.

These shifting investment patterns highlight how major battery manufacturers are recalibrating their global production footprints as EV demand growth moderates from previous projections.

2️⃣ Indonesia’s evolving strategy to monetize its nickel resources

Indonesia possesses some of the world’s largest nickel reserves, a critical battery component, and has been strategically leveraging these resources to attract downstream manufacturing investments.

The country’s policies require companies to process minerals domestically rather than exporting raw materials, creating pressure for foreign companies to establish local manufacturing facilities if they want access to these resources 2.