Indonesia and Foxconn in talks on electric vehicle investment
JAKARTA / TAIPEI – Indonesia and iPhone assembler Foxconn have had discussions about investing in electric vehicles in the Southeast Asian country, although the two sides differ on what was decided.
The two sides confirmed in separate statements that investment talks took place late last week. Such an entry into Indonesia by Foxconn would be a huge boost for a country aiming to position itself as a key player in the global electric vehicle supply chain.
Indonesia said on Sunday that Foxconn “plans to build” electric vehicles and batteries there, although the Taiwanese company has not confirmed that such a plan has been drawn up.
The Indonesian Investment Coordination Council (BKPM) released a statement detailing a meeting on Friday between its chief Bahlil Lahadalia, Foxconn chairman Young Liu and Horace Luke, founder of Taiwan’s leading supplier of electric scooters and exchange systems. Gogoro batteries.
BKPM quoted Liu as saying that Foxconn “plans to build a complete battery and electric vehicle industry in Indonesia” for two and four wheel vehicles. “We will not only come together, but we want to build a whole industry for Indonesia in Indonesia,” Liu said, according to the statement.
Foxconn issued a statement on Saturday confirming that a meeting had taken place “regarding a possible investment in Indonesia” regarding electric vehicles and batteries. He added that the head of BKPM has offered incentives to support the Taiwanese company’s future investments in Indonesia.
Contacted by Nikkei Asia this week, Foxconn reiterated his statement over the weekend, and a person familiar with the matter said discussions were at an early stage and nothing had been decided.
The talks come as Foxconn doubles its EV business, saying last week it was looking to turn its nascent auto segment into a $ 35 billion company in five years. It is already building a production plant in Thailand with state-backed oil and gas company PTT to serve Southeast Asia, and plans to build electric vehicle factories in Europe, India and North America. or the South by 2024.
Earlier this month, Foxconn struck several deals worth $ 280 million with U.S. electric vehicle startup Lordstown Motors to acquire its manufacturing facility in Ohio, which will become the primary vehicle manufacturing base. Foxconn electrics for the North American market.
The Taiwanese automaker joins a long list of companies that have shown interest in investing in Indonesia’s nascent electric vehicle industry. These include BASF, based in Germany, Tesla in the United States, and CATL in China.
South Korean group Hyundai Motor and LG Energy Solution began construction in September of a $ 1.1 billion electric vehicle battery plant in Indonesia, with production scheduled to begin in 2024. Hyundai is also building an automobile plant nearby, which should start production next year.
Companies are particularly interested in Indonesia for its rich reserves of nickel, a key ingredient in electric vehicle batteries. Indonesia produced around 760,000 tonnes of nickel in 2020 and has an additional 21 million tonnes of reserves, according to the US Geological Survey, more than anywhere else in the world in both categories.
The country accounts for about 30% of global nickel production and about 22% of global reserves and is essential for ensuring a stable supply of battery materials.
Archipelagic Indonesia is keen to leverage its reserves by attracting investment and becoming a key cog in the global electric vehicle supply chain. He established a state-owned battery holding company in March and said at the time that in five years the country intended to have an integrated industry encompassing everything from upstream development – l ‘extraction of raw materials for use in electric vehicle batteries – downstream – the manufacture of the batteries and the vehicles themselves.
To boost investment in nickel processing, including refineries, the government also banned exports of untreated nickel ore in January 2020, two years ahead of schedule.