A Korean consortium led by LG has decided to withdraw from a project worth around 11 trillion won ($7.7 billion) to establish an EV battery supply chain in Indonesia, industry sources said Friday.
The consortium, which includes LG Energy Solution, LG Chem, LX International and other partners, had been working with the Indonesian government and state-owned companies to build an "end-to-end value chain" for EV batteries.
The initiative sought to cover the entire process, from sourcing raw materials to producing precursors, cathode materials and manufacturing battery cells.
Indonesia is the world's largest producer of nickel, a key material in EV batteries.
The industry sources said the consortium has decided to withdraw in consultation with the Indonesian government due to shifts in the industrial landscape, particularly the so-called EV chasm, referring to a temporary slowdown or plateau in global EV demand.
"Considering market conditions and the investment environment, we have decided to exit the project," an official from LG Energy Solution said.
"However, we will continue our existing business in Indonesia, such as the Hyundai LG Indonesia Green Power battery plant, our joint venture with Hyundai Motor Group."