iPhone-Maker Foxconn Wants To Foray Into Electric Vehicle Market

Foxconn faces competition in the market for creating white-label EVs that can be tailor-made for clients, whether that's a major automaker or a delivery provider or any other company

Foxconn will provide an update on its EV manufacturing business when it reports results on March 15.

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Taiwanese contract manufacturer Foxconn now wants to manufacture electric vehicles (EVs), according to a report by news agency Reuters. According to the report, Foxconn faces competition in the market for creating white-label EVs that can be tailor-made for clients, whether that's a major automaker or a delivery provider or any other company.

Citing some analysts, Reuters said that the iphone-maker brings established strengths to the mostly loss-making EV industry, Foxconn needs to win a big contract to prove it can ride the wave of disruption.

Foxconn, earlier called Hon Hai Precision Industry Co Ltd, will provide an update on its EV manufacturing business when it reports results on March 15.

"The results of many of our collaborations will be realised one after the other in 2023," the company said in a statement to Reuters. "The demand for EVs is driving industry disruption where prominent traditional automakers have and are pivoting to finding solutions for mobility that are cleaner and smarter."

The report mentioned that the company's proposition is simple: let us build your next EV. It is developing a specialized supply chain, including chips and batteries, and has acquired the former General Motor Co plant in Lordstown, Ohio. It has also hired a former Nissan executive, Jun Seki, to lead its efforts.

For now, by building in Ohio, Foxconn can offer customers access to US federal incentives under the Inflation Reduction Act, Daiwa Capital Markets analyst Kylie Huang said. That's a selling point as traditional automakers juggle building gasoline-powered vehicles with plans to build their own EV capacity.

"If they don't get one this year, next year will be more difficult," Huang said of Foxconn's search for an EV contract with a traditional automaker.

Huang said that the failure to "catch this wave" could force Foxconn to vie with lower-tier Chinese automakers who might switch to EV contract manufacturing and compete on cost.

Canada's Magna International, a top auto supplier, already builds cars for others, and China's Geely has expressed interest. China's Guangxi Automobile Group has started to make EVs on contract for Japanese delivery company, Sagawa Express.

Foxconn is counting on its Mobility in Harmony EV platform, or MIH, to win customers. It calls MIH "the Android system" for EVs and is soliciting partners in an effort to standardize technologies so model variants can be developed quickly and cheaply.

"We want to create that kind of ecosystem so anyone - for example, like United Airlines - can say, 'I want to make a car," Foxconn chief product officer Jerry Hsiao told Reuters during a tour of the company's sprawling Ohio plant. "Sooner or later, maybe the top, traditional (automakers) say, 'Hey, I want to become a product marketing company. Why do I need to carry so many employees?" he said.

Hsiao also worked on the first Android phone for Google and now sees EVs at a similar commercial inflection point.

Foxconn's ambitions are aggressive. Initially targeting 5% of the global EV market and the equivalent of $33 billion in revenue from manufacturing EVs and components by 2025, Foxconn's longer-term goal is to make nearly half the world's EVs.

EV sales have been rising, led by China. Five percent of the market, assuming an EV adoption rate of about 20 per cent by 2025, would be around 900,000 vehicles, roughly what market-leader Tesla sold in 2021.