Apple Supplier Foxconn, Electric Scooter Maker Gogoro To Co-Invest In Indonesia Battery Cell Project

Apple’s chief iPhone assembler, Foxconn Technology, will join Taiwanese electric scooter maker Gogoro and two local partners in powering up an Indonesia factory to make electric vehicles (EVs), their parts and battery cells in one of Asia’s top scooter markets.

Foxconn, also Taiwanese, said in a statement it had signed a memorandum of understanding with the other partners to launch the plant in an industrial zone in Central Java.

“We hope to establish a sustainable new energy ecosystem in Indonesia,” the company said. The “build-operate-localize” partnership will “turn Indonesia’s new energy vehicles on the road into a journey toward upgrades,” the statement added, quoting Foxconn CEO Young Liu.

Indonesian Investment Minister Bahlil Lahadalia has been quoted saying the factory would open in the third quarter this year and cost $8 billion. A Foxconn spokesperson said last week the actual cost and timing may vary from the minister’s comments.

Foxconn invested in Gogoro late last year to help expand into EVs, a global growth area. The Indonesian partners are Indonesia Battery Corp., a partnership of four state-owned companies, and energy firm PT Indika Energy.

The Southeast Asian country is a natural market for electric two-wheelers because more people already ride scooters there than in any Asian nation outside China and India, said Ryan Citron, a senior research analyst for market research firm Guidehouse Insights. Every year, about 5 to 6 million two-wheelers of all types are sold in Indonesia which has a population of more than 270 million.

“Indonesia geographically is the next logical market,” Citron said. “Are they selling scooters in the U.S. or Canada? No—no one uses scooters there.”

A partnership with Gogoro helps Foxconn move away from its old mainstays such as mobile phones into the fast-emerging electric vehicle sector, he adds.

Electric vehicles are gaining global popularity on an overall drop in prices, coupled with tougher environmental regulations in multiple countries.

The world’s electric vehicles market should reach about $1.32 trillion by 2028 on a compound annual growth rate of 24.3%, Fortune Business Insights forecasts. That market will see compound annual growth of about 10% from 2020 to 2025 in the 10 core Southeast Asian countries including Indonesia.

The assembler best known for spinning out electronics at China-based factory compounds has been angling toward EVs over the past year.

In 2021, Foxconn made deals with Los Angeles startup Fisker and global car giant Stellantis to make electric cars in the U.S. and co-develop automotive chips, respectively. In China, the world’s biggest electric vehicle market, Foxconn is working with Chinese automaker Zhejiang Geely Holding Group.

The company, founded by Taiwanese billionaire Terry Gou, had revenue last year of NT$5.9 trillion ($211 billion), up 11% from the previous year.