Foxconn finds electric cars harder to build than iPhones
In the century, Foxconn Technology Corporation followed increasingly complex plans from Apple Inc. to turn silicon, glass, plastic, copper and other materials into hundreds of millions of iPhones. And Apple is just one of dozens of A-list customers of this Taiwanese company; Google, Microsoft, Sony and many others have hired it to make phones, computers, tablets, game consoles, servers, etc. So it’s not too hard to think that Foxconn can do the same. self for cars.
However, by far, cars are becoming a tougher business than electronics.
Last year, Foxconn paid $230 million for a former General Motors Co. factory in Lordstown, Ohio, which aims to make it a hub for boosting U.S. auto production. As part of the deal, the former owner of the 6.2 million square foot, four year old factory Lordstown Motors Corp., hired Foxconn construction its endurance pickup truck, and Taiwanese company contributed capital to a start-up company.
Foxconn has made big predictions for its auto business, saying it will generate $33 billion in annual sales by 2025. And it announced partnerships in Taiwan, Thailand, and Saudi Arabia. although it tram its components business is on track to grow fivefold to more than $3 billion this year, at this point the only vehicles Foxconn makes are a handful of prototypes, several dozen electric buses and about 40 pickups for Lordstown.
Foxconn enters electric vehicles
- May 2022: Completed an agreement with Lordstown Motors to acquire the Ohio plant for $230 million.
- October 2022: Launched two electric vehicle models that will be produced in Taiwan, Thailand and the United States.
- November 2022: Partnering with a Saudi investment fund to build electric vehicles.
- November 2022: Agree to invest up to $170 million in Lordstown and win two seats on the board.
- January 2023: Hire an old person NISSAN runs Jun Seki as chief strategy officer for electric vehicles.
In January, Lordstown asked Foxconn suspends production because of production cost truck exceeds the target selling price of $65,000. A few weeks later, it became apparent that Endurance was suffering from a lack of stamina. At least one owner reported that the truck lost power while driving in cold weather, prompting the company to issue a recall in February. Then, on March 6, Lordstown said that if it could not partner with an experienced automaker, it would be forced to discontinue production of the pickup truck, its only model.
The announcement raises questions about Foxconn’s fledgling electric vehicle business. Lordstown has effectively said that Foxconn cannot continue to manufacture its flagship vehicle despite its ample resources, expertise in turning ideas into products, and decades of struggles with global supply chains. required to get those products out of the factory on time and at a reasonable cost. “Why does Lordstown need another strategic partner to bring this ailing project to life?” asked Danni Hewson, an analyst at brokerage firm AJ Bell. “Is it because Foxconn is simply not ready to become an electric vehicle powerhouse without a little outside help?”
Foxconn says that it remains committed to its EV plans and that its experience in electronics will set the stage for success in the automotive sector. But while Lordstown has committed to continuing to grow new car With the Taiwanese company, the track record of other potential customers shows that Foxconn is far from realizing its e-car dreams. “You need people with high volume production skills,” says Ron Harbor, an independent industrial production consultant. “It’s doable, but I haven’t seen it demonstrated by the startup yet tram companies. I would call it a long shot.”
Nearest place of production is king tractor, last August hired Foxconn to produce self-driving electric farm vehicles. Monarch produces them in limited quantities at a facility in Livermore, California, and the companies plan to move production to Lordstown by the end of March.
Less certain is Fisker Company Foxconn is in talks with the Los Angeles-based company to build a sub-$30,000 electric vehicle called the Pear. Fisher said it fully 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 an initial deal with IndiEV, another California startup. At the time, Foxconn called the company’s prospect of building 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 list shares in a reverse merger, but if it can’t complete that process by July, the company risks bankruptcy.
Those partnerships could still be successful, and Foxconn could find other companies that want it to build their vehicles. But one site in Mount Pleasant, Wisconsin, illustrates what could lie ahead. That’s where in June 2018, Foxconn executives and then President Donald Trump held the ground-breaking ceremony for what was supposed to be a 20 million-square-foot LCD panel factory. $10 billion square foot that Trump has declared the “eighth wonder of the world.”
Over the next two years, Foxconn steadily downsized its ambitions. After initially promising to create 13,000 jobs at the site, Foxconn has renegotiated its contract with the state in 2021. The company today said it has invested more than $1 billion and employed about 1,000 people. . Those people are making electronics like servers, and Foxconn plans to add components for battery packaged at the Wisconsin location to strengthen relationships with both existing automakers and startups. Michael Shields, a research fellow at Policy Matters Ohio, a nonprofit that assesses the economic impact of major industrial investments in the state, said Foxconn’s performance in Wisconsin is a welcome sign. alarm. “I do think there is cause for concern,” he said, “about what is going to happen in Lordstown.”