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LG Energy Solution will set up a full-cycle traction battery production in Indonesia
Tesla founder Elon Musk has repeatedly noted that the potential for growth in electric vehicle production is constrained by the infrastructure for the production of traction batteries. Other market participants are also aware of this, and therefore by all means contribute to an increase in the volume of production of battery cells. LG Energy Solution will develop core business in Indonesia.
Image source: Electrive
This country has large reserves of nickel compounds, which are in demand in the production of traction batteries for electric vehicles. Indonesian authorities have long resisted corporate attempts to tap the country’s natural wealth to mine and export low-grade nickel. Therefore, within the framework of a memorandum of understanding signed with LG Energy Solution, the Indonesian authorities, as noted by Reuters, managed to agree on the creation of enterprises that imply a full cycle of traction batteries production – from nickel mining to obtaining ready-made batteries.
The agreement stipulates that at least 70% of the ore mined in Indonesia will be processed here. According to representatives of the Indonesian side, this is the first ever case of concentration of all links of the production chain on the territory of one state. In January, Elon Musk was already interested in the potential of Indonesia as a production base for the production of traction batteries. Considering that LG Energy Solutions is one of Tesla’s suppliers, it can be assumed that batteries produced in Indonesia will eventually find use in this brand’s electric vehicles. Korean manufacturer intends to invest at least $ 9.8 billion in the development of the Indonesian industry.