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Taiwan’s Foxconn to Invest in $8bn Indonesia EV, Battery Project

Jakarta has long courted the Taiwan tech giant and the investment marks a major EV expansion for the company and a milestone for Indonesia’s ambitions


Foxconn plant
Foxconn is aiming to capture around 5% of the global electric vehicle market by the end of 2025 and has said it is hoping to boost its capacity to make EV chips, many of which are small lower-end integrated circuits including those used in power management.. Photo: Reuters.

 

Taiwan-based Foxconn will invest in an $8 billion project in Indonesia to manufacture electric vehicles (EVs) and batteries, the Southeast Asian country’s investment minister said on Wednesday.

The iPhone assembler will use the investment to construct a factory in an industrial zone in Batang in Central Java.

The plant will produce battery cells, cathode precursor and telecommunication spare parts in addition to the electric vehicles, the minister told an investment forum.

The firm last month said it would partner with the ministry and other companies for a wide scope of investment on EVs, including battery manufacturing.

Foxconn parent Hon Hai Technology Group signed a memorandum of understanding (MoU) with the ministry and several local and foreign partners to jointly develop a “sustainable new energy ecosystem in Indonesia” that focuses on batteries.

Under the MoU, Hon Hai and its partners – state-owned Indonesia Battery Corporation, energy company Indika, and Taiwanese e-scooter maker Gogoro – will explore battery manufacturing for four-wheel and two-wheel EVs.

The companies are expected to muster a total investment of $8 billion, Foxconn chairman Liu Young-way said on Thursday.

 

Exchange and Recycling

The cooperation will also include the development of EV supporting industries such as energy storage systems (ESS), battery exchange stations and battery recycling.

Foxconn has expanded EV activities in recent years, announcing deals with US startup Fisker and Thai energy group PTT.

In 2020, Foxconn said it aimed aims to provide components or services to 10% of the world’s EVs by 2027, and has been in talks with multiple car manufacturers for future cooperation.

Indonesia has been courting Foxconn investment for years after a 2015 deal collapsed. “Foxconn’s (investment) didn’t happen because it had asked for land and tax holiday incentive before, Bahlil said.

“So, I got orders from [President Joko Widodo] to find a way to get Foxconn,” he added. “Now, the government has provided cheap land in an industrial zone … close to a toll road and railway.”

Indonesia is a major producer of nickel and has ambitious plans to leverage its supplies of nickel laterite ore used in lithium batteries to become a global EV production and export hub.

 

  • Reuters, with additional editing by Neal McGrath

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.

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