Rumors of one Apple’s electric car project has long thrilled investors and iPhone enthusiasts. Nearly a decade after details about project leaked, The Cupertino mobile remains mythical – but that has not stopped other consumer electronics companies from moving forward. On the other side of the globe, people will soon be able to order a vehicle from the Taiwanese company that mastered the manufacture of Apple gadgets in China. Welcome to the era of the Foxconn mobile.
In October 2021, the Hon Hai Technology Group, better known internationally as Foxconn, announced plans to produce three of its own electric vehicles in collaboration with Yulon, a Taiwanese automaker, under the name Foxtron. Foxconn, best known for collecting 70 percent of iPhones, has similar ambitions for the automotive industry: to become the preferred manufacturer of a brand new kind of car. To date, it has signed agreements to make cars for two U.S.-based EV startups, Lordstown Motors and Fisker.
Foxconn’s own vehicles – a hatchback, a sedan and a bus – do not particularly ooze Apple chic, but they represent a big leap for the consumer electronics manufacturer. Foxconn’s ambitious expansion plan also reflects a major shift across the automotive world in terms of technology and geography. The United States, Europe and Japan have defined what cars are in the last 100 years. Now the changing nature of the car with increased electrification, computerization and autonomy means that China can increasingly determine what car manufacturing is.
If Foxconn succeeds in building a large automobile manufacturing business, it will help make China an automotive epicenter capable of overshadowing conventional powerhouses in the United States, Germany, Japan and South Korea. Foxconn did not respond to requests for an interview.
The automotive industry is expected to undergo major changes in the coming years. And October 2020 report from McKinsey concluded that automakers will invent new ways to sell vehicles and generate revenue through apps and subscription services. In some ways, the car of the future sounds eerily much like a smartphone on wheels.
This is partly because there is no better time than now for an electronics manufacturer to try car manufacturing, says Marc Sachon, a professor at the IESE Business School in Barcelona, who studies the automotive industry. Electric vehicle drivelines are simpler than internal combustion engines, with fewer components and fewer steps involved in the assembly. The electricity supply chain is simpler to manage than the conventional supply chain, which is one of the core competencies of the established car manufacturers. China, Sachon adds, has a strong EV ecosystem, from batteries to software and even component manufacturing.
China is particularly well positioned to lead the attack on electrification. The country already has some of the world’s most advanced battery manufacturers, including CATL and BYD, the latter of which also produces cars. Automakers in the region can gain a head start in understanding and leveraging new battery technologies simply by proximity – much in the same way that software companies benefit from being close to chip design companies.