Jayanty Nada Shofa, Jakarta – Chinese nickel material manufacturer Huayou is set to break ground on its Indonesian electric vehicle (EV) battery ecosystem project by August, thus officially replacing South Korea's LG Energy Solution.
Energy Minister Bahlil Lahadalia announced Thursday that Huayou had taken over LG's spot in the megaproject worth a total of $9.8 billion that focused on building the entire EV supply chain in the country. LG has already invested in a $1.2 billion battery cell joint venture – namely the HLI Green Power – in Karawang. The plant has already entered operations.
However, the Indonesian government decided to kick the South Korean battery maker out of the project, calling them as being "too slow" in executing the plan. This leaves Huayou with at least $8 billion worth of work remaining.
"President Prabowo Subianto has approved of Huayou to carry out the rest of the project [left by LG]. The groundbreaking ceremony for the next joint venture will soon take place.... As for the date, it should be no later than August," Bahlil told the press at the presidential palace complex in Jakarta.
The aforementioned LG-backed HLI Green Power brings together Seoul-based automaker Hyundai and local firm Indonesia Battery Corporation (IBC). State-owned enterprises such as oil producer Pertamina and gold miner Antam are among IBC's shareholders.
The Karawang project boasts an annual production capacity of 10 gigawatt/hour (GWh) battery cells – enough to power 150,000 EVs. However, there are plans for a second-phase development to double its production capacity to 20 GWh. The next phase of development is expected to take up $2 billion in investment.
LG was supposed to participate in four joint ventures related to the EV ecosystem, be it nickel mining, percussors, cathodes, and even the recycling system, according to media reports. HLI Green Power was one of those four enterprises.
Bahlil revealed that Indonesia would try to push for a bigger share of ownership in the upcoming joint ventures within the ecosystem. To this end, it wants to include the newly minted sovereign wealth fund Danantara in the mix. Danantara already manages the assets of all Indonesian government-run businesses, thus paving the way for the fund's entry into the EV battery ecosystem.
"State-owned enterprises already hold 51 percent of the shares in the upstream side, as planned. But we will have another joint venture, of which around 30 percent of the shares already belong to us.... But now that we have Danantara, Prabowo wants us to raise the government's shares to above 40 percent or even up to 50 percent," Bahlil said.
He added: "All these talks about the share increase are still under negotiations."