LG Energy Solution is investing US$9.8 billion into Indonesia to build a factory that produces batteries for Electric Vehicles (EV) to integrate with the country鈥檚 production of nickel, a major component of lithium battery.
LG Energy Solution, a subsidiary of South Korea鈥檚 multinational corporation LG, has signed a Memorandum of Understanding with the Indonesian government towards a $9.8 billion (around Rp 142 trillion) investment for the establishment of a battery production factory for electric vehicles.
Should the deal come through, it would make Indonesia a major global player in the electric vehicle industry as the country is also home to one of the world鈥檚 largest reserves of nickel (approximately 21 million metric ton according to the US Geological Survey). The mineral is a main component of lithium battery. It would also be the largest single investment ever made by a company into Indonesia in the last two decades.
Indonesia, eager to cover the entire supply chain for battery production, has commissioned four large state-owned companies to integrate the mineral extraction to final production process into what is called the MIND ID Consortium. Bahlil Lahadalia, Head of the Indonesian Investment Coordinating Board, said the location of the precursor and cathode industry for EV battery production would be the Batang Industrial Zone in Central Java, while the corresponding smelting and mining location will be established in North Maluku.
As for the domestic market, Indonesia, in its National Generalized Energy Plan (Rencana Umum Energi Nasional or RUEN), aims to produce 2,200 electric cars and 2.13 million electric motorcycles by 2025, and a further 4.2 million electric cars and 13.3 electric motorcycles by 2050. The plan also stipulates the establishment of 1,000 charging stations across the country.