Foxconn Made the iPhone in Your Hand and Wants to Make the EV in Your Garage
The Taiwanese company that assembles iPhones also wants to become a leading contract manufacturer of electric vehicles, a plan fueled by the purchase of Lordstown Motors Corp.
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electric truck factory in Ohio.
Foxconn Technology Team,
the largest contract electronics manufacturer in the world, is known for aging products sold by major technology brands such as Apple Inc.,
Amazon.com Inc. and Alphabet Inc.
It now expects to expand into a pricier piece of technology. The chairman of Foxconn said he wanted to supply three million electric vehicles annually by 2027, which he estimated was nearly 10% of the global market then.
It has made a busy deal in recent years to gain a foothold in the entire auto-supply chain, including semiconductors, components, software and assembly. Partners include Jeep and Chrysler maker Stellantis NV and Los Angeles -based EV startup Fisker Inc.,
looking to produce more than 250,000 vehicles a year in the US with the help of Foxconn.
Now Foxconn has reached an agreement to buy Lordstown Motors’ factory in Ohio, the electric-truck startup that took over General Motors Co’s former plant. but had trouble delivering a product. Lordstown Motors said Foxconn will be making Lordstown -branded brands including this debut pickup truck, the Endurance.
Chairman Young Liu said the Lordstown plant will speed up Foxconn’s timeline for having EV production capacity in North America. People familiar with the plans for the factory said its capacity could be used for other clients with the brand as well.
Analysts say a lot of revenue could be made if Foxconn could figure out the low assembly of EVs selling $ 40,000 or $ 50,000. And the rise of EV startups brings a potential of customers looking to tap Foxconn’s manufacturing expertise to challenge incumbent vehicle makers.
But a car is more than just an iPhone on wheels.
“You need a better and bigger supply chain,” said analyst Bakar Sadik Agwan of GlobalData, a consulting firm. “Making an EV is a bit more complicated than manufacturing a smartphone.”
Mr. Liu, chairman of Foxconn, said in March that Foxconn felt at home making EVs because they relied on electronics and software rather than a gasoline -powered engine. Foxconn’s main advantage over traditional auto manufacturers is speed, as well as a drive to prove it can succeed in the toughest manufacturing tasks, he said.
“Foxconn is the new kid in town. We need to build on our capabilities as soon as possible,” Mr. Liu said.
He told investors in August that the company plans to make EVs in the US and Thailand starting in 2023 and was talking about many potential locations in Europe.
Sleeping over Foxconn’s plans is the possibility of an Apple EV, a project the Silicon Valley company has been working on for years but never announced.
“The relationship between Apple and Foxconn could extend from phones to cars,” said Soumen Mandal, an analyst at Counterpoint Research. However, Mr. Mandal observed that Foxconn has a joint venture in Taiwan set to make cars and start selling them in 2023, which could make Foxconn a competitor to a possible future Apple EV.
It remains unknown whether Apple will put its brand name on a vehicle. If it did, it would likely look at making cars for American consumers in the U.S., given the political sensitivity about having auto production overseas in countries like China.
Mr. Liu of Foxconn said the expansion of manufacturing in the US is to meet customer needs. Apple declined to comment.
Foxconn, formally known as Hon Hai Precision Industry Co., has taken a broader view of the EV business than simple vehicle assembly, planning for a future where branded clients seek help with some aspects of car making rather than the whole process Most large car makers in developed markets like the US still want to make their cars.
Foxconn spoke with suppliers of EV batteries and materials and in August bought a Taiwan semiconductor factory to make car chips. Mr. Liu said in September that he hopes to build a comprehensive EV supply chain in Taiwan and achieve better semiconductor and battery technology to overcome the major barriers to EV adoption: long charging times, insufficient coverage and high prices.
“Through these preparations, our EV customers no longer have capacity issues,” he said.
William Wei, a former Steve Jobs ally at Apple, was hired by Foxconn last year and is now overseeing the development of a software and hardware platform for EVs, essentially a starter kit that manufacturers can customize to produce of electrical and self-drive cars.
Mr. Wei said at a company event a year ago that he wanted Foxconn to be the Android of EVs, a reference to Google’s operating system used by smartphone manufacturers around the world.
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