KAOHSIUNG, Taiwan -- Foxconn broke ground on its first battery cell plant on Wednesday, marking the latest move by the key iPhone assembler to make inroads into the booming electric vehicle industry.
"We plan to build a localized ecosystem for the battery supply chain, from materials to battery cells and battery packs, in Kaohsiung," Foxconn Chairman Young Liu said at the groundbreaking ceremony in the southern Taiwanese city. "The city will become an important base for Foxconn's EV global footprint.
Once the ecosystem in Kaohsiung is up and running, Liu said, Indonesia will likely become the location of Foxconn's first overseas battery plant. It has partnered with e-scooter company Gogoro, the Indonesian government and local businesses to codevelop electric vehicles and battery-swapping technologies.
In Kaohsiung, trial production of the lithium iron phosphate batteries -- the same type of battery that China's battery king Contemporary Amperex Technology Ltd. makes -- is scheduled to begin in the first quarter of 2024 with a planned capacity of 1.27 gigawatt hours. The batteries will be first used in domestic electric buses, electric passenger vehicles and energy storage systems. Foxconn's battery-related investments in the city, which will include a research and development center, will reach as much as 6 billion New Taiwan dollars ($202 million), Liu said.
The new facility is part of Foxconn's plan for building an EV ecosystem in Kaohsiung, where the company is also setting up facilities for electric bus assembly and energy storage systems. Foxconn aims to use its experience in the city as a starting point for building up similar production bases overseas.
Developing and manufacturing its own batteries is part of Foxconn's effort to secure sources of crucial EV parts amid a global chip and component shortage. The iPhone assembler has already stepped up its efforts in automotive semiconductors, including acquiring a chip plant in the northern Taiwanese city of Hsinchu and announcing plans to build chip facilities in India and Malaysia.
Foxconn's foray into the EV battery market comes as global players like Samsung SDI and LG Chem of South Korea, Panasonic of Japan, and China's CATL are already fighting for control of this key component.
Building up its battery capabilities will be a critical test as Foxconn tries to cement its presence in the industry. Since it is new to mass producing batteries, Foxconn lacks the broad client base and deep engagements with global automobile makers that its competitors have, industry watchers note.
Taiwan currently does not have a scalable battery cell cluster, but the tech-oriented island has been stepping up its efforts to build a battery supply chain. Apart from Foxconn, Taiwan Cement is building its first battery cell plant in Kaohsiung, while conglomerate Formosa Plastics Group formed a company to gear up its development of batteries and energy storage systems.
Major economies like the U.S. and Europe are attaching more importance to EV batteries amid the unprecedented chip and component crunch, which includes constrained supplies for batteries. A supply chain review by Washington last June said localizing the battery supply chain would be crucial to the development of America's EV industry. Also last year, the EU approved the 2.9 billion-euro ($3 billion) European Battery Innovation fund to increase "strategic autonomy in a sector vital for Europe's green transition and long-term resilience."