Source: Foxconn

On its annual tech day on October 18, Foxconn unveiled the latest progress of its grandiose EV project: three working EV prototypes were showcased to demonstrate how far Foxconn had gone ever since declaring its EV ambition in 2020. 

Model E was a luxury flagship sedan designed in cooperation with the Italian automotive firm Pininfarina. Meanwhile, Model T was an electric bus that, according to Foxconn, had met Federal Transit Administration (FTA) regulations and standards. The Model T has reportedly completed 200,000km of acceleration endurance test and more than 1,000 hours of rigid strength tests. 

Most prominent of all, the Model C SUV would be publicly available in Taiwan as early as 2023, and priced below NT$1 million (approximately US$ 35,800). All three prototypes use the open platform built by the Foxconn-initiated MIH Alliance. In addition, Yulon Motor Corp., Foxconn’s strategic partner in the automotive industry as well as Taiwan’s biggest indigenous automaker, will also be the first to adopt Model C and E. At Foxconn’s site in Thailand, Model C will also be producers, expecting to hit into the Southeast Asian market after two or three years.

According to Young Liu, Foxconn chairman, discussions with other car brands were still taking place, with more announcements to follow. The Foxconn leader also estimated that its EV business would contribute to Foxconn revenues around 2023. 

A drastically different approach to enter the EV industry

As early as 2008, Foxconn had already come in contact with the emerging EV industry when Tesla approached Foxconn. According to Elon Musk back then, Tesla would always be a manufacturing company, and building an alliance with contract manufacturers like Foxconn would speed up Tesla’s production. Terry Kuo, Foxconn founder, also turned his attention to EVs in 2014, and reportedly remarked “if we can make iPhones, why can’t we make electric vehicles? They are basically iPhones on wheels.” 

As other leading Taiwanese electronics contract manufacturers such as Quanta Computer, Pegatron Corp., and Wistron Corp. have all identified electric vehicles as the next growth driver, the majority of them seek to transform themselves into Tier 1 or Tier 2 suppliers, focusing on Advanced Driver Assistance Systems (ADAS), in-vehicle infotainment and electronic control units (ECUs). Their roles as Tesla suppliers have especially convinced them of further opportunities in the auto industry. Quanta, for example, manufactured Tesla’s ECUs, while Pegatron has decided to set up a production site in the United States to supply Tesla. 

By initiating the MIH Open Platform and its EV joint venture with Yulon Motor, Foxconn has taken a distinctive approach to enter the EV business. 

Leveraging Yulon’s car-manufacturing expertise, a rare asset in Taiwan, Foxconn seeks to build an open EV platform that will accelerate the entry of electronics manufacturers into the auto sector. The generally closed systems of the automobile industry have long prevented close cooperations with the IT industry. Taiwan’s small domestic market has also deterred the capital-intensive and time-consuming process to develop a car platform. The strategy doesn’t come without risks: its eventual success partly depends on how many know-hows MIH participants are willing to share, especially when some Taiwanese electronics manufacturers are concerned by the potential conflict of interest between MIH and other clients from the auto sector. 

A new supply chain configuration awaits 

Ultimately, it also comes down to how Foxconn formulates its global strategy. Reflecting on the ongoing chip shortage crisis, Foxconn firmly believes that it has a definitive advantage against traditional automakers in terms of supply chain management and product development speed as the world’s largest contract electronics manufacturer – as demonstrated by the speedy introduction of its EV prototypes within one year of announcing its EV ambition. Benefiting precisely from its sprawling global production network, Foxconn is also entering various partnerships with automakers in Europe, the US, China and Southeast Asia to acquire more car-manufacturing knowledges while broadening its access to foreign automobile markets. 

Now, with Foxconn one step closer to become the de-facto leader of Taiwan’s fledging EV industry, one challenge is to addresses the changing supply chain configurations of Taiwan’s ODM/OEM industry, driven by the automobile sector’s need for localized production. In addition, it is worthy to observe how Foxconn will coordinate its semiconductor business, another pillar of the company, in conjunction with its global EV supply chains.

 

 

References: Foxconn, UDN