Speed up the pace of building cars! Foxconn to build Electric vehicle Plant

Foxconn's foray into electric vehicles is accelerating.

Liu Yangwei, chairman of Foxconn, said at a briefing in Taipei on March 16 that investment in electric vehicles could increase by 30 per cent next year and would choose to produce electric vehicles in Mexico or Wisconsin.

It is understood that the Wisconsin plant, worth more than $10 billion, was originally planned to produce large TV screens. Later, Foxconn said it would be used to produce small LCD screens, and then plans to build servers instead. At present, the factory has suffered losses due to underutilization.

As for the location of the final electric vehicle production plant, Liu Yangwei said that the availability and cost of skilled labor and engineering personnel will be one of the key determinants, and the final results will be announced by July 1.

Foxconn quickens the pace of car construction

In recent years, with the maturity of the smartphone market, the future room for growth is gradually shrinking. The electric vehicle market is in a "rising" stage, and Foxconn sees this opportunity and is making a big shift to the electric vehicle field.

As the absolute leader of global consumer electronics contract manufacturing, Foxconn started the car layout as early as 2005. During the year, Foxconn bought a 100 per cent stake in Taiwan's Antai Electric, one of Taiwan's four largest car harness factories, and began making automotive electronics such as battery wires, reversing radars and smart devices.

In 2013, Foxconn entered the supply chain of multinational car companies such as Mercedes-Benz and BMW, providing them with auto parts and components; in 2014, Foxconn partnered with BAIC to invest in R & D, production and manufacturing of a new generation of power batteries and their systems to acquire battery technology. In July of the same year, Taiwan Lithium Branch, a subsidiary of Foxconn, invested 2 billion yuan in Anhui to build a high molecular polymer cell and battery pack production project and set up a lithium battery production base.

In 2015, it jointly invested 1 billion yuan with Tencent and Harmony Automobile to set up Harmony Futeng, which was responsible for the manufacturing part, but soon Foxconn abandoned its investment and the project was stranded. In 2016, Foxconn invested US $119.9 million in DiDi to acquire a 0.355% stake in Didi. In 2017, Foxconn's Hon Hai Group, through its subsidiary Futaihua, invested 1 billion yuan in Ningde Times and acquired a 1.19% stake. In 2018, Foxconn, Ali and IDG Capital jointly led Xiaopeng Motor's round B financing with a total amount of 2.2 billion yuan.

In 2020, Foxconn's foray into the field of electric vehicles has accelerated.

On January 16, 2020, Foxconn announced that it would sign a cooperation framework agreement with Fiat Chrysler to set up a joint venture with a 50% stake to develop and produce electric vehicles and operate vehicle networking business. The initial plan of the two sides is to produce in mainland China, which is mainly supplied to the local market and may be exported in the future. On February 7, Foxconn announced that it would sign a cooperation agreement with Yulong Motor to set up a joint venture in the future. The new joint venture company will jointly develop automobile-related business by combining the development of Huachuang electric vehicle technology under Yulong, as well as Hon Hai's manufacturing and design capabilities in electronic components.

On January 4, 2021, Foxconn signed a strategic cooperation framework agreement with Nanjing Economic and technological Development Zone and Baiteng Motor to promote mass production of M-Byte. On January 13, Foxconn and Geely jointly signed a strategic cooperation agreement, the two sides will set up a joint venture to provide contract manufacturing and customized consulting services for global automobile and travel enterprises, and clearly enter the field of automobile contract manufacturing.

On Feb. 24, Foxconn and Fisk jointly announced that they would jointly develop an electric vehicle, which will be produced by Hon Hai under the Fisker brand and sold to markets such as North America, Europe, mainland China and India, and is expected to be in mass production in the fourth quarter of 2023.

On March 1st, Foxconn announced that it had joined Hillhouse Ventures to complete its investment in AutoCore.ai. Mainly used to accelerate the functional security middleware system platform for AutoCore.OS intelligent mobile computing and the product implementation under a variety of chips and EEA architectures, further leading the construction of open source self-driving projects around the world, serving product development services including chip manufacturers, system integrators and a number of automobile manufacturers.

As Apple's largest contract manufacturer, Foxconn's layout in the automotive industry can be said to strive to prepare for Apple's contract manufacturing.

Apple's car-building plans have kept a low profile and have not been sure whether to build their own cars or look for contract factories since they launched the project in 2014. There has been a lot of rumors about the contract manufacturer candidates for building cars for Apple, and Foxconn has always been a recognized candidate. At the briefing, Liu Yangwei responded that it was just a rumor.

Car building has become a business growth point.

At present, Foxconn's auto business is mainly focused on parts. The car business contributed about T $9.5 billion ($340 million) in sales to Foxconn in 2019, a fraction of the company's annual sales of more than T $5tn in 2019 and 2020. Liu Yangwei expects that the electric vehicle-related business will not make a significant contribution to the company's revenue until 2023.

Recently, Foxconn said that the first batch of electric vehicles based on the company's open software and hardware platform will be released by the end of this year. "this year will be an important year for Foxconn's electric vehicle efforts, with two or three models using the open platform of Foxconn's MIH electric vehicle, including one electric bus and two passenger models, unveiled in the fourth quarter," Liu said.

He also stressed: "Foxconn's goal is to make electric vehicles based on the MIH platform account for 10% of the world's electric vehicles by 2025. This goal has not changed."

According to Liu Yangwei's estimates, the global electric vehicle market is expected to reach 30 million vehicles between 2025 and 2027. This means that by 2027, 3 million of the world's electric vehicles will be labeled Foxconn.

With the increasing number of entrants, the smart car track is becoming more and more crowded, and Foxconn still faces many challenges in the future if it wants to achieve its ambitious goals.