Foxconn, a Taiwanese electronics company that assembles Apple's iPhones, is moving forward with its plans to enter the market for electric vehicles (EVs).
However, rather than selling EVs under its brand name, it will concentrate on designing and manufacturing cars for both traditional automakers and the emerging wave of EV startups.
Dealings With Automakers
As Insider Business put it, Foxconn aims to achieve for Tesla what it does for Apple.
To mirror its success in electronics, Foxconn's chairman announced in October that the business hopes to produce 40-45% of the world's EVs in the future.
According to the report, Foxconn has quickly arranged a lineup of automotive customers since revealing its initial EV prototypes last year.
The faltering automotive company Lordstown Motors sold its former General Motors (GM) factory in Lordstown, Ohio, to the iPhone manufacturer earlier this year. Some electric pickup trucks manufactured by Foxconn for Lordstown Motors have recently begun delivering to the clients.
For its second model, the Pear, Fisker has contracted Foxconn to produce it in Ohio beginning in 2024. Prototypes for yet another startup, Indi EV, will be manufactured by Foxconn.
Furthermore, they have signed a collaboration agreement with Yulon Motor of Taiwan.
Based on a November report from Germany's Automobilwoche, Volkswagen is contemplating having Foxconn manufacture its new Scout-branded electric SUV and pickup truck for US consumers.
Wise Business Move
Bill Russo, CEO of Shanghai-based auto-industry consultancy Automobility, told Insider that Foxconn's entry into the EV market was a smart business decision.
The business has found success with capital-intensive electronics production because it can acquire components in bulk. He added it is well-positioned to do the same for EV producers, who want to minimize development and market costs.
In addition, as cars become more automated and internet-connected, they will have a greater need for the kinds of electronic parts that Foxconn specializes in producing.
"That sounds very similar to the modern electronic products that Foxconn produces," Russo said. Since they know how to buy in bulk, they have access to many screens, chips, and so on. Russo called for a cost decrease to cut expenditures.
Potential Beneficiary
Foxconn's entry into the industry will be a benefit for EV companies who do not have the capital to develop their own plants, according to Tu Le, general director of automotive consultancy Sino Auto Insights.
Apparently, not all new EV businesses have access to financing on par with that of US innovators Rivian and Lucid, which has allowed them to spend enormous amounts building up their own factories.
Even now, Le thinks Tesla and other non-union manufacturers might eventually outsource manufacturing to Foxconn.
But first, Foxconn has to show that it can mass-produce electric sport utility vehicles and pickup trucks to the same high standards as its iPads and iPhones.
"It's a ton of opportunity in front of them if they can prove that the first vehicles that roll off the line in Ohio are at the highest quality, highest reliability, highest safety standards that Americans expect," Le explained.
