Minister of Industry: LG Exits EV Battery Project, Chinese Company Huayou Ready to Take Over
Minister of Industry Agus Gumiwang Kartasasmita stated that the decision of LG Energy Solution to withdraw from the investment in the Electric Car Battery (EV) project in Indonesia is not a big problem. According to him, a new Chinese investor partner, Huayou, will replace LG’s position in the project.
Huayou’s Role in the Battery Industry in Indonesia
Huayou, headquartered in Tongxiang, Zhejiang, is active in the research, development, and production of lithium-ion batteries and cobalt materials. Its products are widely used in various sectors, including electronics and electric vehicles. According to Agus, the turnover of investors in large-scale projects like this is a common thing and will not interfere with the main purpose of developing electric vehicles (EV) in Indonesia.
Government commitment in accelerating EV ecosystem development
Agus emphasized that the process of accelerating the development of the electric car ecosystem in Indonesia will continue to run according to the plan and still achieve the targets set. The Ministry of Industry (Kemenperin) is committed to continuing to encourage the growth of the electric vehicle and battery industry in Indonesia.
Increasing the number of electric vehicles in Indonesia
Since the start of the program to accelerate the development of electric vehicles, the number of electric vehicles in Indonesia has continued to increase. In 2024, the total registered electric vehicles have reached 207 thousand units, showing an increase of around 78% compared to the previous year which was recorded at only 116 thousand units.
“The electric automotive industry in Indonesia is growing rapidly, exceeding the growth of its own market sector. This is supported by government policies that provide leeway for business people and an increase in the percentage of local spare parts,” said Agus.
Indonesia’s electric automotive industry target by 2030
The Ministry of Industry targets that by 2030, Indonesia can produce 9 million units of two- and three-wheeled electric motorcycles and 600 thousand units of electric vehicles such as cars and buses. This aim is to reduce the consumption of fuel oil (BBM) to 21.65 million barrels and reduce CO2 emissions by 7.9 million tons.
the development of the electric vehicle industry in Indonesia
Currently, Indonesia has 63 companies that produce two- and three-wheeled electric motorcycles with a production capacity of 2.28 million units per year. The total investment in this sector reached Rp 1.13 trillion. In addition, there are nine electric vehicle manufacturers capable of producing 70,060 units per year with an investment of Rp 4.12 trillion.
There are also seven companies that produce electric buses with a production capacity of 3,100 units per year and an investment of Rp 0.38 trillion. The total investment for all these sectors reached Rp 5.63 trillion, which had a positive impact on the Indonesian economy, including creating jobs.
The development of the battery industry for electric vehicles
So far, Indonesia has two companies that produce batteries for electric vehicles, namely PT Industri Ion Energisindo with a production capacity of 10,000 units of battery per year and an investment of Rp 18 billion, and PT Energi always new with a production capacity of 12,000 units of battery and an investment of Rp 15 billion.
In addition, there are two companies that produce electric vehicle battery cells. PT HLI Green Power, the result of a collaboration between Hyundai and LG, has an initial production capacity of up to 10 GWh with an investment of USD 1.1 billion. This factory aims to provide between 150,000 to 170,000 units of electric vehicles through PT Hyundai Energy Indonesia, which is able to produce up to 120 thousand battery packages per year with a total investment of Rp 674 billion.
Battery Cell Industry in Indonesia
Meanwhile, PT International Chemical Industry has a production capacity of up to 100 GWh per year and plans to increase its production capacity to 256 GWh per year (equivalent to 25 million cells). Apart from PT Hyundai Energy Indonesia, there is one other factory, namely PT Gotion Green Energy Solutions Indonesia, which plans to invest more than US$ 8.7 million with a production capacity of 17,952 units per year.
Conclusion
The electric vehicle and battery industry in Indonesia continues to grow rapidly, driven by large investments and supportive government policies. With the existence of new partners such as Huayou and the sustainability of investment in the battery sector, Indonesia is getting closer to its goal to become a center for electric vehicles production in the Southeast Asia region.
