Keep an eye on the raw materials! Foxconn is negotiating to set up an electric car factory in Indonesia

Following the launch of Foxconn's three electric cars, Foxconn is no longer just a contract manufacturer of Apple phones, it has joined the ranks of electric car companies. According to media reports, Foxconn has begun discussions with Indonesia on the establishment of an electric car plant, but the discussions between the two sides are still divided.

Both Foxconn and Indonesia confirmed the talks. Indonesia said Foxconn had planned to develop an electric car and battery industry in the region, but Foxconn did not confirm Indonesia's position.

Indonesian Investment Coordination Committee (BKPM) issued a statement saying that the head of Indonesia Investment Coordination Committee Baril Lahadalia (Bahlil Lahadalia), Foxconn Chairman Liu Yangwei and Gogoro founder Lu Xuesen held preliminary exchanges and discussions on the future investment layout in Indonesia. Foxconn intends to build a complete battery industry ecology in Indonesia. At the same time, the head of BKPM said that Foxconn would be provided with incentives to support Foxconn's investment in Indonesia.

Foxconn did not comment further on the discussion. Discussions are still at an early stage and Foxconn has not yet decided whether to build a plant in Indonesia, according to people familiar with the matter.

In fact, Foxconn chose Indonesia to build an electric car factory, mainly because Indonesia is rich in nickel, which is also one of the key raw materials for electric car batteries. Indonesia produced an estimated 760000 tons of nickel in 2020, with another 21 million tons of reserves, more than anywhere else in the world, according to the United States Geological Survey. The country accounts for about 30 per cent of the world's nickel production and 22 per cent of the world's reserves, which is critical to ensuring a stable supply of battery materials.

In addition to plans to build a plant in Indonesia, Foxconn also plans to build a plant in Thailand. It is reported that Foxconn and Thai state-owned company PTT (PTT Public Company Limited) formed a joint venture, the new company is expected to complete registration in the fourth quarter of 2021, and plans to build a new factory.

Foxconn reached a $280 million deal earlier this month with Lordstown Motors Corp, a US electric car company, to sell its former General Motors plant in Ohio in exchange for cash and equity investment. The plant is expected to become Foxconn's production base in North America.