Foxconn, other firms look to enter Indonesia’s EV market

President Joko Widodo straps on his helmet before test riding an electric motorbike called Gesit in the front yard of the Presidential Palace in Jakarta onJan 26, following a meeting to discuss mass production of the bike. - Antara

JAKARTA (The Jakarta Post/Asia News Network): Taiwan-based companies and local firms have inked an US$8 billion (Rp 114 trillion) investment deal to develop Indonesia’s electric vehicle ecosystem.

Foxconn, a contract manufacturer known for Apple’s iPhone, and Gogoro, an electric scooter and battery swap technology company, represent the Taiwan side in the deal, while coal giant Indika Energy and state-owned Indonesia Battery Corporation are the Indonesian side.

These companies will develop a wide range of EV segments, from cars, two-wheelers and buses to battery production and supporting industries, namely energy storage systems, battery exchange or swap stations, battery recycling as well as research and development.

“Under President Joko 'Jokowi' Widodo’s second term, Indonesia is focusing on encouraging sustainable investment in green energy and industry,” Investment Minister Bahlil Lahadalia said in a statement on Friday (Jan 21), adding that the government would take care all of the required permits.

The deal brings Indonesia – which holds almost a quarter of the global nickel reserves – a step closer to becoming a key player in the battery industry. The government has been defending its nickel ore export ban as it seeks to protect its reserves of the metal to attract EV investment, among other purposes.

State-Owned Enterprises (SOEs) Minister Erick Thohir said in a statement that the investment would help Indonesia achieve its net-zero emissions target by 2060, while also creating a multiplier effect for the benefit of local companies and paving the way for EV technology transfer.

Foxconn chairman Liu Young-Way said they wanted to contribute to developing the local EV ecosystem and related energy market in Indonesia.

“We hope that by sharing our technology and experience, we can help create more opportunities for local companies in the new energy and EV market,” Young-Way said in a statement on Friday.

Indika Energy vice president Azis Armand said in a press release on the same day that the deal was in line with the company’s strategy to diversify into EV industries, which the company had begun last year by forming PT Electra Mobilitas Indonesia (EMI) to develop electric motorcycles and the connected ecosystem.

Gogoro Inc. CEO Horace Luke said the deal marked a new era in Indonesia's commitment to becoming a global leader in sustainability and supported an open ecosystem providing Indonesia with better and cleaner transportation options.

“The collaboration between Gogoro, Foxconn, IBC and Indika will create an electric vehicle ecosystem that enables a healthy EV industry,” Luke said in a statement on Friday.

Apart from the larger deal, Gogoro also inked a memorandum of understanding (MoU) with Electrum, a local electric two-wheeler manufacturer, to develop the EV ecosystem.

However, neither company revealed any specifics on the deal. Electrum is a joint venture between local super app Gojek and publicly listed TBS Energi Utama, previously known as coal-mining firm Toba Bara Sejahtera (TBS).

“We also believe that the quality of the technology and solutions we built with Gogoro will build trust among customers and encourage people to try two-wheeled electric vehicles of Electrum,” Pandu Sjahrir, Electrum president director and TBS Energi Utama vice president, said in a statement on Friday.

Gojek has worked with Gogoro to test hundreds of electric motorcycles since last year.

“We believe that collaboration with Gogoro can strengthen our position to change driving habits of the Indonesian people and transform our entire fleet at Gojek by 2030,” Kevin Aluwi, Electrum director and Gojek CEO, said in a statement on Friday.

Gojek’s primary competitor, Grab Indonesia, began using electric vehicles back in 2019, and its EV fleet has since grown to 8,500 vehicles. The ride-hailing service provider also runs 27 battery swap stations provided by various EV companies for its fleet in Jakarta and Bali.

Institute for Development of Economics and Finance (Indef) executive director Tauhid Ahmad told The Jakarta Post on Tuesday that these investments and commitments reflected great potential in Indonesia’s EV industry.

Foreign investors were looking at the Indonesian market now that there was an EV ecosystem involving ride-hailing companies, he said, adding that investing in Indonesia was also a way for firms to secure the necessary raw materials.

“[Indonesia’s] emission reduction commitment could also drive the EV industry in Indonesia in the future,” Tauhid said.

Grab Indonesia president Ridzki Kramadibrata affirmed the company’s commitment to the government’s plan for an EV ecosystem and vowed to partner in that effort with the Intelligent Transport System (ITS) Indonesia society and World Resources Institute (WRI) Indonesia.

“We will continue to support an increase in the use of electric vehicles with a target of having more than 14,000 [vehicles] in our own fleet this year," he said in statement on Sunday.

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