Foxconn, officially called Hon Hai Precision Industry, has been busy building connections within the automotive supply chain, joining a wave of tech firms that are applying their expertise in electronics and communications to the auto sector.
At the recent Consumer Electronics Show in Las Vegas, Foxconn's automotive venture with Yulon Motor Co., called Foxtron, unveiled its Model B, a stylish EV hatchback, along with its automotive electronics.
In December, Honda and Nissan revealed plans to explore a merger, a decision that some reports suggest may have been influenced by Foxconn's interest in Nissan.
From iPhones to electric vehicles
Regardless of whether Foxconn aimed to acquire Nissan, the company has set ambitious targets, claiming it wants to produce four out of every ten EVs sold globally. Over the last ten years, the contract manufacturer has poured nearly $1.3 billion into automotive-related acquisitions, according to Mergermarket, a research firm focused on mergers and acquisitions.
Besides Foxtron, its joint venture with Yulon Motor, Foxconn has a 50% partnership with Stellantis NV to create and market automotive semiconductors, and another 50% joint venture with Germany’s ZF Friedrichshafen AG to manufacture passenger car chassis. The company has also invested in Indigo Technologies, which is working on a road sensing system developed at MIT, and has teamed up with Blue Solutions to develop solid-state batteries, along with a collaboration with Italian auto designer Pininfarina.
Foxconn owns a 34% share in Sharp, a Japanese electronics firm that's been making strides into the automotive world. This year, they rolled out a concept vehicle called the LDK+, which is a boxy minivan that can transform into a living space, complete with solar panels, a storage battery, and a large LCD screen.
Vivian Wong, who heads Mergermarkets’ M&A Analytics for the Asia Pacific, mentioned in an email that Foxconn's entry into electric vehicles is a smart move, anticipating the growing overlap between electronics and automotive tech, much like their plug-and-play approach in electronics.
Other tech giants are also stepping into the auto industry. Companies like Huawei, Xiaomi, Alibaba, and Baidu are ramping up their electric vehicle efforts, leveraging their tech expertise as cars become more high-tech.
Huawei has launched several EV partnerships under its Harmony Intelligent Mobility Alliance, including collaborations with Chery Automobile for Luxeed brand EVs and Seres Group for Aito brand EVs. They’re also working with JAC Motor to take on luxury brands like Rolls-Royce and Mercedes-Benz.
Japanese electronics firms are getting in on the action too. Besides Sharp's collaboration with Foxconn, Sony has teamed up with Honda to create the Afeela sedan, which is set for pre-sale this year.
The growing need for connectivity among cars, smartphones, laptops, and TVs is drawing these companies into a rapidly evolving market, even though some have faced challenges due to tariffs and other issues.
As for Nissan, they launched the Leaf back in 2010, marking the first mass-market EV. With their solid EV technology, vehicle platforms, and sales capabilities, they could be an attractive partner for newcomers like Foxconn.
Japanese media and Taiwan’s Central News Agency reported that Jun Seki, Hon Hai’s chief strategy officer and a veteran from Nissan, recently visited France to discuss matters with Renault SA, which owns a 15% stake in Nissan and additional shares through a French trust. Seki has previously served as Nissan's chief operating officer and was the president of Dongfeng Nissan, a joint venture in China.
In a formal announcement regarding plans to merge with Honda, Nissan Motor Corp. CEO Makoto Uchida mentioned that Foxconn had not reached out to Nissan about a potential merger. Foxconn has not commented on this.
Nissan's internal challenges are just a small piece of the larger puzzle that all major automakers face due to the rise of Tesla, which produces over half of its electric vehicles in China, along with competition from Chinese companies like BYD. The market is so cutthroat that many smaller Chinese EV manufacturers have already gone under, unable to keep up with the larger, more established players.
The journey hasn’t been easy so far. As sales growth begins to slow and consumers question the practicality and cost of switching to electric vehicles, Foxconn has a tough road ahead if it wants to compete with industry giants like BYD and Tesla.
Foxconn was planning to produce the Endurance battery electric truck at a former General Motors facility in Lordstown, Ohio, which it acquired in 2023. However, Lordstown Motors Corp. filed for bankruptcy. Additionally, Foxconn formed a partnership with Fisker Inc. in 2021 to produce up to 250,000 Ocean EV trucks, but Fisker also filed for Chapter 11 bankruptcy protection in June.
Despite these setbacks, Foxconn seems to be pressing on. The company showcases six EV models on its website, including the Model T bus, Model V pickup truck, Moden N van, Model B, and its “luxury flagship” Model E sedan.