Young Liu. Foxconn is turning towards vehicles as smartphone growth is stalling. — Bloomberg
TAIPEI: Foxconn Technology Group will decide between Mexico and Wisconsin for the site of its first electric-car plant this year, making a big bet on the nascent business at a time technology giants including top customer Apple Inc are looking to expand into vehicles.
The Taiwanese manufacturer already has operations in the Latin American country and the central US state, and could use its existing structures, chairman Young Liu of Hon Hai Precision Industry Co., Foxconn’s flagship unit, said in a briefing here today. Availability and affordability of skilled labour and engineering talent will be among deciding factors, he said.
Foxconn, the world’s largest assembler of iPhones, is hoping to replicate its smartphone success by building clients’ electric vehicles from the chassis on up.
Amid reports of Apple’s car project gaining momentum, Foxconn has bulked up its automotive capabilities, aiming to become a contender in the race to make vehicles for the US giant.
“Foxconn is the new kid in town,” the chairman told reporters. “We are going to build our capability, so our potential customers will feel comfortable and give us products to make.”
Liu said the company is working on finalising a joint-venture agreement with Fiat Chrysler Automobiles, now part of Stellantis NV. He refused to be drawn on Apple, saying only that the widely reported car project was “a rumour.”
Foxconn is talking to US electric-car companies that it hasn’t announced deals with yet, Liu said. He reiterated the manufacturer targets a 10% market share in electric cars, and said the company could deliver a solid state battery earlier than its originally stated goal of 2024.
The company in October introduced its first-ever EV chassis and a software platform aimed at helping automakers bring models to the market faster. Last month, Liu said two light vehicles based on the platform would be unveiled in the fourth quarter, with Foxconn also planning to help launch an electric bus around the same time.
Foxconn is turning towards vehicles as smartphone growth is stalling.
Global production volume of mobile devices, a core business for Foxconn, has fallen for three years starting 2018, though it is set to rebound this year as demand recovers following the coronavirus pandemic, according to Taiwanese research firm TrendForce.
In contrast, the electric-vehicle industry is growing fast. Global sales of EVs probably reached nearly 2.5 million in 2020, and are set to rise by about 70% in 2021, IHS Markit predicted in January. In 2025, global sales will top 12.2 million, indicating compound annual growth of nearly 52%, the research firm said in a December forecast.
In January, Foxconn signed a manufacturing deal with embattled Chinese electric-vehicle startup Byton Ltd. with the aim to start mass production of the Byton M-Byte by the first quarter of 2022. A week later, Foxconn and Zhejiang Geely Holding Group Co. said they would joining forces to provide production and consulting services to global automotive enterprises.
Last month, Foxconn inked another deal with American EV startup Fisker Inc. on a car that will be built by the Apple partner and target multiple markets including North America, Europe, China and India.
Production of the vehicle, which will be sold under the Fisker brand, is set to start in the fourth quarter of 2023.
