Foxconn Seen Looking at $2 Billion Indonesia EV Partnership

Azis Armand, chief executive of Indika Energy, speaks during an interview at his office in Jakarta on Wednesday. Photo: Reuters

Taiwan’s Foxconn is reportedly considering a $2 billion investment with an Indonesian resources company to make electric vehicle (EV) batteries for cars and energy storage equipment.

Azis Armand, chief executive of Indika Energy, Indonesia’s third biggest coal producer, said a feasibility study for the proposed joint venture with the contract electronics giant is being prepared.

“The main interest is Indonesia’s large domestic market, which relatively has a low adoption rate … though we’re not ruling out export markets like Vietnam and China,” Azis said.

Indika, like many energy companies has been diversifying its businesses beyond coal amid a global push to end the use of fossil fuels.

A partnership was established between Foxconn, Indika and three other entities earlier this year in a memorandum of understanding to collectively invest $8 billion in EV and battery manufacturing in Indonesia.

Focusing on Non-Coal Businesses

Indonesia, which has a population of 270 million, has set a target of having 13 million electric motorcycles – including converted ones – and 2.2 million electric cars on its roads by 2030.

Indika has been focusing on boosting revenue from its non-coal businesses, such as gold mines and also EVs. It aims for 50% of its revenue to come from non-coal interests by 2025, from 12% recently, which Azis said was key to remaining relevant.

“If we look only at the coal sector, our participation won’t be sustainable in energising Indonesia,” Azis said.

It hopes to reach the 50% target with about $500 million of investment in the next three years, most going into its existing projects, such as electric bike brand, Alva, which will be launched commercially in August.

Indonesia has been trying to court Foxconn for years but a previous deal agreed in 2015 collapsed. Foxconn did not immediately respond to request for comment on the Indika partnership.

Reuters, with additional editing by George Russell

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.