Indonesia and Foxconn in talks on electric vehicle investment

Indonesia and iPhone assembler Foxconn have had talks about investing in electric vehicles in the Southeast Asian country, although the two sides differ over what has been decided.

The two sides confirmed in separate statements that investment talks took place at the end of October. Such an entry into Indonesia by Foxconn would be a huge boost for a country aiming to position itself as a major player in the global electric vehicle supply chain.

Indonesia said on October 24 that Foxconn “plans to build” electric vehicles and batteries there, although the Taiwanese company has not confirmed that such a plan has been made.

The Indonesian Investment Coordination Board (BKPM) released a statement detailing a meeting between its chief Bahlil Lahadalia, Foxconn chairman Young Liu and Horace Luke, founder of the leading supplier of electric scooters and battery swap systems from Taiwan Gogoro.

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 confirmed that a meeting had taken place “on 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, Foxconn reiterated his earlier statement; a person familiar with the matter said discussions were at an early stage and nothing had been decided.

This article is from Nikkei Asia, a global publication with a unique Asian perspective on politics, economics, business and international affairs. Our own correspondents and external commentators from around the world share their perspectives on Asia, while our Asia300 section provides in-depth coverage of 300 of the largest and fastest growing listed companies from 11 economies outside of Japan. .

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The talks come as Foxconn has reaffirmed its commitment to the electric vehicle business, saying it plans 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 in October, Foxconn struck several deals worth $ 280 million with U.S. electric vehicle start-up 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, an essential 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 percent of global nickel production and about 22 percent of global reserves and is essential for ensuring a stable supply of battery materials.

Archipelagic Indonesia is keen to capitalize on its reserves by attracting investment and becoming a critical cog in the global electric vehicle supply chain. He established a state-owned battery holding company in March and said that in five years the country intends to have an integrated industry encompassing everything from upstream development, extraction of raw materials for electric vehicle batteries, downstream – the manufacture of 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.

A version of this article was first published by Nikkei Asia on October 25, 2021. © 2021 Nikkei Inc. All rights reserved.

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