BANGKOK — New players in the automotive industry, including Taiwan’s Foxconn and China’s Huawei Technologies, are making significant strides in the electric vehicle (EV) market. This influx of competition has prompted established manufacturers like Japan’s Nissan and Honda to announce collaborative efforts aimed at countering these ambitious entrants.
Known publicly as Hon Hai Precision Industry, Foxconn is actively expanding its influence in the automotive supply chain, which is drawing attention from technology companies that are well-versed in electronics and communication platforms. During the recent Consumer Electronics Show (CES) held in Las Vegas, Foxconn showcased its auto venture with Yulon Motor Co., dubbed Foxtron, which presented its notable Model B, a stylish hatchback EV, alongside various automotive electronic innovations.
In December, Honda and Nissan revealed their intention to explore a possible merger, a decision analysts speculate may have been influenced by Foxconn’s keen interest in Nissan. Foxconn has articulated its aspirations in the automotive sector, stating a goal of producing 40% of the world’s EVs. Over the last decade, the company has poured nearly $1.3 billion into automotive acquisitions, according to Mergermarket, a research firm that focuses on mergers and acquisitions.
Foxconn’s automotive portfolio is extensive. Through its joint venture Foxtron, it collaborates with Yulon Motor, and it also maintains a 50% joint venture with Stellantis NV to develop and market automotive semiconductors. Another partnership with Germany’s ZF Friedrichshafen AG focuses on manufacturing chassis for passenger cars. Furthermore, Foxconn’s investments span various firms such as Indigo Technologies, which is developing a road sensing system and collaboration deals with Blue Solutions for creating solid-state batteries and with Italian designer Pininfarina for automotive design.
The company also has a significant 34% stake in Japanese electronics manufacturer Sharp, which is gradually transitioning towards automotive technology. This year, Foxconn and Sharp unveiled an innovative LDK+ concept vehicle, a versatile minivan that can transform into living quarters, featuring solar energy storage and a large LCD display.
Vivian Wong, head of Mergermarkets’ M&A Analytics for the Asia Pacific, noted that Foxconn’s strategic entry into the EV realm mirrors their electronics operations, positioning them favorably as the automotive landscape evolves towards increased electronic integration.
Numerous technology giants are also entering the EV sphere. Companies like Huawei, Xiaomi, Alibaba, and Baidu are amplifying their vehicle ambitions, capitalizing on their technological prowess as cars grow increasingly computerized. Huawei has launched multiple EV joint ventures under its Harmony Intelligent Mobility Alliance, working with brands such as Luxeed and Aito on various vehicle projects. Additionally, its partnership with JAC Motor aims to introduce luxury vehicles comparable to preeminent brands like Rolls-Royce and Mercedes-Benz.
Japanese firms have also joined the fray. Sony Corp., in collaboration with Honda, plans to launch the Afeela EV sedan for pre-sale within the year. This influx of companies into the automobile sector is catalyzed by the rising interconnectedness of devices, prompting ambitions to reshape the ever-evolving electrified market, even in the face of obstacles such as tariffs.
Nissan holds historical significance in the EV market, unveiling the Leaf as the first mass-market electric vehicle back in 2010. Its established EV technology and platforms are likely appealing to newcomers like Foxconn. Reports from Japanese outlets indicate that Jun Seki, Foxconn’s Chief Strategy Officer, who formerly worked at Nissan, engaged in discussions in France regarding cooperation with Renault, which owns a 15% stake in Nissan.
While Nissan’s CEO Makoto Uchida confirmed their intentions for a potential merger with Honda, he stated that Foxconn has not made any direct overtures toward merging with Nissan. The competitive landscape is intensified by the emergence of rivals like Tesla, which produces over half of its EVs in China, and domestic players such as BYD that have already established a strong market presence.
Nevertheless, challenges abound. As consumer interest in electric vehicles wanes amidst affordability concerns and changing perceptions, Foxconn faces a steep uphill battle against industry titans like BYD and Tesla. Previously, Foxconn aimed to manufacture the Endurance EV truck at a repurposed GM facility in Ohio, but the venture encountered setbacks when Lordstown Motors Corp. filed for bankruptcy. Another partnership with Fisker Inc., aimed at producing up to 250,000 Ocean EV trucks, also faltered as Fisker sought Chapter 11 bankruptcy protection.
Despite these hurdles, Foxconn remains undeterred. Its website currently lists six distinct EV models in development, including the Model T bus, Model V pickup truck, Moden N van, Model B hatchback, and its flagship Model E luxury sedan. The competitive and rapidly evolving landscape of the electric vehicle sector continues to present both significant challenges and opportunities for these companies moving forward.
