Foxconn Technology Group’s (富士康科技集團) planned purchase of embattled start-up Lordstown Motors Corp’s auto plant in Ohio might make it a stronger contender to assemble electric vehicles for Apple Inc, but success with the endeavor is far from guaranteed.
The Taiwanese company is the largest maker of iPhones, giving it a potential edge as Apple explores the automotive sector.
Foxconn agreed to spend US$280 million on the Lordstown deal, one of the top vehicle-related investments it has made over the past two years.
Photo: AP
Foxconn’s early moves into electric vehicles have yielded few tangible results and Apple is expected to require solid proof of vehicle-manufacturing expertise before it settles on a partner — if the iPhone maker decides to make the leap into autos at all.
Shares of Hon Hai Precision Industry Co (鴻海精密), as Foxconn is known in Taiwan, fell in Taipei trading yesterday in a sign of investor doubt the plant purchase would be a game changer for the electronics giant.
“It is only logical for Foxconn to explore vehicle manufacturing to stay relevant,” said Steve Man, an automotive analyst at Bloomberg Intelligence in Hong Kong. “If you look at the upstream companies in its value chain, many are dabbling in electric, smart vehicles. Cars are becoming the next mobile devices.”
While Foxconn has inked several electric-vehicle partnerships, its investment in the business has been relatively modest and far behind that by auto giants such as Volkswagen AG or Hyundai Motor Co.
Scoring a deal with Apple would vault Foxconn into a major player in the rapidly growing segment, which it is targeting as a source of growth beyond low-margin electronics.
Apple, which is not expected to enter the market for several years, but is kooking into it, would be the ultimate prize for every aspiring electric vehicle manufacturer.
Working in Foxconn’s favor is its strong relationship with the US firm. The years-long partnership has expanded as Apple has added product categories and the company now accounts for about 50 percent of Foxconn’s annual sales.
Any Apple automobile is still years away and the company has suffered setbacks, including the departure of the head of its electric vehicle project to Ford Motor Co.
An Apple electric vehicle has for years been somewhat of a paradox — it is one of its most hotly anticipated products, yet the company has publicly said almost nothing about it.
Analysts at CL Securities Taiwan said in a note that the plant purchase is cheaper and quicker than building capacity from scratch, which “should help alleviate some investors’ concerns on the visibility for EV [electric vehicle] earnings contribution.”
Foxconn has yet to commercially release any vehicle following the debut of its electric vehicle platform last year.
It plans to start mass production of Lordstown’s Endurance electric pickup truck in Ohio in April next year, a person familiar with its schedule said.
The Lordstown deal “reflects Foxconn’s flexibility in providing design and production services for different EV customers,” Hon Hai chairman Young Liu (劉揚偉) said in a statement yesterday.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS