LG Energy Solution, a company based in South Korea, announced on Tuesday that it has decided to pull out of a major project in Indonesia for building electric batteries. The company cited various reasons, including concerns about the investment environment.

In 2020, LG Energy Solution had signed a deal worth $8.4 billion for the Grand Package project. This project was aimed at establishing a local electric vehicle battery value chain in Indonesia. However, due to factors such as market conditions and the investment environment, the company has now officially withdrawn from the project.

Despite this decision, LG Energy Solution mentioned that they will continue to explore collaboration opportunities with the Indonesian government, particularly focusing on the Indonesia battery plant operated by HLI Green Power. HLI Green Power is a joint venture between LG Energy Solution and Hyundai Motor Group, and it is Indonesia’s first electric vehicle battery plant.

The Indonesian government has been striving to position the country as a key player in the global electric vehicle supply chain by utilizing its abundant nickel reserves to attract investments. Although the director general of coal and mineral of the energy and mineral resources ministry did not respond to requests for comment, local media reported that he expressed optimism that the government would find other partners to advance its electric vehicle ambitions.