Indonesia and iPhone assembler Foxconn have held talks over electric vehicle investment in the Southeast Asian country, though the two sides differ on what was decided.
Both sides in separate statements confirmed investment discussions took place late last week. Any such entry into Indonesia by Foxconn would be a huge boost for a country that aims to position itself as a key player in the global EV supply chain.
Indonesia said on Sunday that Foxconn “plans to build” electric vehicles and batteries there, though the Taiwanese company stopped short of confirming that any such plan was made.
Indonesia’s Investment Coordinating Board (BKPM) released a statement detailing a meeting on Friday between its head, Bahlil Lahadalia, Foxconn chairman Young Liu, and Horace Luke, founder of Taiwan’s leading electric scooter and battery exchange system provider Gogoro.
BKPM quoted Liu as saying Foxconn “plans to build a comprehensive electric battery and electric vehicle industry in Indonesia” for two-wheel and four-wheel vehicles. “We will not only assemble, but we want to build a whole industry for Indonesia in Indonesia,” Liu said, according to the statement.
Foxconn had released a statement on Saturday confirming a meeting took place “over a possible investment in Indonesia” regarding EVs and batteries. It added that the BKPM chief offered incentives to support the Taiwanese company’s future investments in Indonesia.
When contacted by Nikkei Asia this week, Foxconn reiterated its statement from the weekend, and a person familiar with the matter said that the discussions are at an early stage and nothing has been decided.
The talks come as Foxconn doubles down on its EV business, saying last week that it is looking to turn its nascent auto segment into a USD 35 billion business in five years. It is already building a production facility in Thailand with state-backed oil and gas company PTT to service Southeast Asia, and plans to build EV factories in Europe, India, and either North or South America by 2024.
Earlier this month, Foxconn struck multiple deals worth USD 280 million with US EV startup Lordstown Motors to acquire its manufacturing plant in Ohio, which will become Foxconn’s first EV manufacturing base for the North American market.
The Taiwanese maker joins a long list of companies that have shown interest in investing in Indonesia’s nascent EV industry. These include the likes of Germany-based BASF, Tesla of the US, and China’s CATL.
South Korea’s Hyundai Motor Group and LG Energy Solution in September started construction on a USD 1.1 billion EV battery plant in Indonesia, which is slated to begin production in 2024. Hyundai is also building an automobile factory nearby, with production expected to start next year.
Companies are particularly interested in Indonesia for its rich nickel reserves, a key ingredient in EV batteries. Indonesia produced an estimated 760,000 tons of nickel in 2020 and has a further 21 million tons of reserves, according to the US Geological Survey, more than anywhere else in the world in both categories.
The country accounts for roughly 30% of the world’s nickel production and about 22% of global reserves and is critical to ensuring a stable supply of battery materials.
Archipelagic Indonesia wants to leverage its reserves by bringing in investment and becoming a key cog in the global EV supply chain. It set up a state-owned battery holding company in March, and said at that time that in five years, the country intends to have an integrated industry encompassing everything from upstream development—mining raw materials for use in EV batteries—to downstream, the manufacturing of batteries and the vehicles themselves.
To spur investment into nickel processing including refineries, the government also put into effect a ban on exports of unprocessed nickel ore in January 2020, two years earlier than expected.