During the last decade, Foxconn Technology Group has followed increasingly complex plans since Apple Inc. to transform silicon, glass, plastic, copper and other materials into hundreds of millions of iPhones. And Apple is just one of dozens of A-list customers for the Taiwanese company; Google, Microsoft, Sony and many others have hired it to make phones, computers, tablets, game consoles, servers and more. So it’s no exaggeration to think that Foxconn could do the same for cars.
So far, however, cars are proving to be more difficult than electronic gadgets.
Last year, Foxconn paid $230 million for a former General Motors Co.. factory in Lordstown, Ohio, aiming to make it the center of a US auto manufacturing push. As part of the deal, the four-year-old former owner of the 6.2 million-square-foot factory Lordstown Motors Corp., hired Foxconn to be built It is Endurance pickup truck, and Taiwanese society took a stake in the startup.
Foxconn has made big predictions for its automotive business, saying it will generate $33 billion in annual revenue by 2025. And announced partnerships in Taiwan, Thailand and Saudi Arabia. Although his electric vehicle The component business is on track to quintuple to more than $3 billion this year. At this point, the only vehicles made by Foxconn are a handful of prototypes, a few dozen electric buses and around 40 vans for Lordstown.
Foxconn’s entry into electric vehicles
- May 2022: Finalizes deal with Lordstown Motors to acquire Ohio plant for $230 million.
- October 2022: Unveils two electric vehicles to be built in Taiwan, Thailand and the United States.
- November 2022: Partners with a Saudi fund to build electric vehicles.
- November 2022: Agrees to invest up to $170 million in Lordstown and takes two seats on the board.
- January 2023: Former hiring Nissan exec Jun Seki as Chief Strategy Officer for Electric Vehicles.
In January, Lordstown requested Foxconn suspends production because the manufacturing cost trucks exceeded the target sale price of $65,000. A few weeks later, it became clear that Endurance was suffering from a lack of stamina. At least one owner reported the truck lost power while driving in cold weather, prompting the company in February to issue a recall. Then, on March 6, Lordstown said that if it couldn’t team up with an experienced automaker, it would be forced to discontinue the pickup, its only model.
The announcement raises questions about Foxconn’s fledgling EV business. Lordstown was effectively saying Foxconn couldn’t keep its flagship vehicle in production despite its vast resources, expertise in turning ideas into products, and decades of battling global supply chains to get those products out of the factory. on time and at a lower cost. “Why does Lordstown need another strategic partner to see the struggling project through?” asks Danni Hewson, analyst at AJ Bell. “Is it because Foxconn just isn’t ready to become a powerhouse without a little outside help?”
Foxconn says it remains committed to its electric vehicle plans and its experience in electronics is paving the way for success in cars. But while Lordstown is committed to further development new vehicles with the Taiwanese company, the track records of other potential customers suggest that Foxconn remains far from realizing its electric car dreams. “You need people skilled in mass production,” says Ron Harbour, an independent industrial manufacturing consultant. “It can be done, but I haven’t seen it demonstrated by the startup Electric car businesses. I would say that’s a long shot.
The closest to production is monarch tractor, which last August hired Foxconn to make autonomous electric agricultural vehicles. Monarch makes them in limited numbers at a factory in Livermore, Calif., and the companies plan to shift production to Lordstown by the end of March.
Less certain is Fisker Inc. Foxconn is in talks with the Los Angeles company to build a sub-$30,000 electric vehicle known as the Pear. Fisker says he expects Foxconn to make the car, but the two companies are still negotiating the cost, according to people familiar with the matter. And in September, Foxconn signed a first deal with IndiEV, another California startup. At the time, Foxconn called the prospect of building the company’s prototypes a “success story”. But at the end of September, IndiEV had less than $220,000 in the bank. The company now says it aims to go public in a reverse merger, but if it can’t complete that process by July, it risks going bankrupt.
These collaborations could still succeed, and Foxconn could find other willing companies to build their vehicles. But a site in Mount Pleasant, Wisconsin, illustrates what lies ahead. It was there that in June 2018, Foxconn executives and then-President Donald Trump held a groundbreaking ceremony for what was to become a $10 billion LCD panel factory and 20 million square feet that Trump has heralded as “the eighth wonder of the world.” .”
Over the next two years, Foxconn scaled back its ambitions several times. After initially promising to create 13,000 jobs at the site, Foxconn renegotiated its contract with the state in 2021. The company now says it has invested more than $1 billion and hired around 1,000 people. These people make electronic components such as computer servers, and Foxconn plans to add components for battery packs on the Wisconsin site to deepen ties with existing automakers and startups. Still, Foxconn’s record in Wisconsin is a red flag, says Michael Shields, a researcher at Policy Matters Ohio, a nonprofit that assesses the economic impact of large industrial investments in the state. “I think there is cause for concern,” he said, “about what will happen in Lordstown.”