A City In Taiwan Tells Us How It Plans To Be A Big Cleantech Player

If you go to a news search like Google News and search for Taiwan, you’ll find a whole lot of bad news right now. As of this writing, Taiwan’s facing armed animosity from the mainland after a visit by US House of Representatives Speaker Nancy Pelosi. Military exercises, threats, and even missiles flying over Taiwan’s capitol city dominate the news. But, we recently came across some good cleantech news from a city on the south end of the country’s main island: Kaohsiung.

In a press release, they tell us that the worldwide sales of electric vehicles are increasing at an accelerated rate. To establish Kaohsiung as a key base for the global EV industry, the Kaohsiung City Government partnered with Hon Hai Technology Group (also known as Foxconn) to address several issues, including smart electric buses and smart city development, with the goal of becoming a test field that provides comprehensive business and service models to entice foreign manufacturers to invest in Kaohsiung and establish a full industrial supply chain for the EV sector.

This is a story we’ve told readers about before, but in my three-part series I mostly focused on Foxconn, and didn’t focus on things from the perspective of the rest of the supply chain, the local governments involved, and how the local industry would play out.

What makes Foxconn different is that it isn’t going to be the big name. Almost all EV firms sell (or plan to sell) vehicles using their own brand, developed by them, and frequently manufactured by them. Nobody should be blamed for thinking Foxconn is doing the same thing, because that’s what gas and diesel carmakers have been doing for a century.

Foxconn is a far more significant player than most people are aware of, owing to its behind-the-scenes and under-the-radar operations. Foxconn appears to be emerging as a distinct brand now, but the firm has made it clear that it intends to maintain operating in stealth while also broadening into another field.

What this recent press release shows us is that while Foxconn is behind the scenes, there’s an even bigger ecosystem of private and public players that is behind the scenes of what’s behind the scenes. Foxconn, recognizing the importance of a solid base in metal materials and precision finishing techniques in Kaohsiung, is aiming to create an EV ecosystem and a complete battery production chain in the southern city as part of its ambition to enter the EV market, from design through to production of batteries and cells, as well as energy storage systems. It also aims to bring battery manufacturing down all points of the supply chain, from upstream raw materials to midstream cells and end-stage battery packs.

In addition, significant investments have come from firms such as WIN Semiconductors Corp., the world’s major foundry for power amplifiers and LiDAR technology for electric cars, and lithium battery manufacturer Molie Quantum Energy Corp., which has laid the groundwork for the EV sector chain.

Foxconn’s subsidiary FoxFoxtron Vehicle Technologies has established a research and development and manufacturing plant for battery cells in Qiaotou Science Park. The City Government’s aim to have all public bus service run on electricity by 2030 necessitated the first Model T electric bus being delivered to Kaohsiung Bus in March, with a targeted initial volume of 30 vehicles and more would be given out as demand dictated. To assist the growth of the electric bus sector in Kaohsiung, the city government has increased incentives for electric bus operation and purchase, with subsidies up to NT$1.5 million per vehicle available.

Foxconn said in June that it will invest NT$6 billion to create the Battery Cell Research and New Product Introduction Center in Ho Fa Industrial Park, which is expected to reach a manufacturing capacity of 1GWh for electric buses, passenger cars, and energy storage systems in the first quarter of 2024.

To make sure the local area gets a bigger boost on top of all of this Foxconn activity and becomes more of an industry powerhouse, the city is taking next steps.

The city government is also interested in working with the Ministry of Transportation and Communications to establish a national-level test site for self-driving cars and Vehicle-to-Everything in the Qiaotou Science Park. With its collaboration with the Smart Pole Standard Promotion Alliance, businesses will be able to test Vehicle-to-Everything technology, services, and product verification. This will entice more relevant industries to establish a presence in the region and, as a result, create around 5,000 new jobs. The aim is to make Kaohsiung into a smart city model and an example for what they’re calling “package smart city export.”

Why This Matters

Obviously, every city and every country wants to get in on the next big thing. But what this press release and the investment by Foxconn shows is that there’s a lot more going on behind the scenes than just trying to be first to market. They’re trying to become a durable presence in the emerging EV market and keep Taiwan relevant on the world stage like they did with semiconductors.

On top of the financial benefits of being an important industry player, there are also important geopolitical reasons to be needed by the world. Compared to the People’s Republic government on the mainland, Taiwan has a very small military. They have to make sure that the international community sees them as an important and integral part of the global economy and not a tiny nation embroiled in a “quarrel in a far away country, between people of whom we know nothing.”

There are also important air quality issues in Taiwan, just as there are across the Strait. The island has been plagued by air pollution, in part due to being downwind of China, but also to its own industrialization. The move to electric vehicles will help address some of those concerns.

So this isn’t just a simple story about one company’s plans. It’s a window into how an entire country is positioning itself for the future.

However you feel about Taiwan, this focus on clean technology is not only good for it, but good for everyone involved or watching.

Featured image provided by the City of Kaohsiung.

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