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November 3, 2021
The disruption of the automobile industry became more of a reality just days ago when the startup, Lucid, delivered its first electric vehicle (EV). Lucid is a pure play auto company trying to carve out a section of the market for itself. The luxury EV maker is set to go public and one of its investors, oil-producer Saudi Arabia, will end up owning 60% of the company.
Tesla, which helped set off the move to EV, is already worth more than all big three automakers combined. There are plenty of new entrants who say they will join in the avalanche of EV production.
THE iPHONE ASSEMBLER
One of the latest to announce it is coming to the US is a company best known for putting together your iPhone. They believe their manufacturing experience will allow them to assemble EVs efficiently and profitably. Their business model, if it works, could be quite disruptive.
Twitter photo from Apple CEO Tim Cook as he visited a Foxconn assembly plant in China. (Credit: Tim Cook/Twitter)
You may have heard of Foxconn, the assembler made famous by its work for Apple. Officially named Hon Hai Precision Industry Co., Foxconn, is a Taiwan-based company that does a lot of its assembly work in mainland China.
COMING TO AMERICA
Foxconn has been working for more than a year to get into the auto business. There were rumors that Foxconn might help assemble the pickup trucks for another EV start-up, Lordstown Motors. Foxconn made surprising headlines a month ago by announcing that it not merely do the assembly work, it is buying Lordstown’s factory in Ohio.
Foxconn facility in Wisconsin. A $10 billion deal was scaledback to less than $1 billion by the Taiwan company. (Credit: Foxconn)
The Chairman of Foxconn, Young Liu, says the purchase will help the company achieve, “the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers.”
THE ANDROID OF AUTOS
The last part of that quote is news too. Foxconn wants to become an “open-source” assembler of EVs. Ironically, the assembler of iPhones for Apple (closed architecture system), Foxconn wants to become the Android (open architecture system) of EV production. Foxconn has a platform (chassis, battery system, motor) that other companies could use for their own body design and proprietary systems. Foxconn will put it all together.
Foxconn's MIH platform for Electric Vehicles (Credit: Foxconn)
Stellantis, the third largest global auto company, has already signed an agreement to get into business with Foxconn. They are forming a new company, Mobile One, to work on in-cabin entertainment and connectivity. Carlos Tavares, the CEO of Stellantis, highlighted the importance of software saying, “The vehicles of the future will be increasingly software-driven and software-defined. Customers today and, in the future, demand and expect ever increasing software driven and creative solutions to connect the drivers and passengers with the vehicle inside and out.”
Foxconn's prototype for its Model E electric vehicle unveiled in October. The CEO called the model, "the boss's car." (Credit: Foxconn)
AUTOMAKER
That’s not all. Foxconn also will build its own vehicles. Foxconn partnered with another Taiwanese company, Yulon Motors, to learn the auto business. Just a year after forming that new company, Foxtron, three prototype EVs were unveiled in a flashy presentation. There is a bus, a sedan called the Model C, and what they dubbed “The Boss’s Car.” That luxury Model E includes design by the Italian firm Pininfarina.
Foxconn's electric bus prototype. (Credit: Foxconn)
While Foxconn made its name making iPhones, it says the EV has now, “become the world's largest and most expensive smart electronic device.” The Taiwan company is feeling confident as it moves into the EV business. The CEO told the world, “Hon Hai is ready and no longer the new kid in town.”
Cover Photo Credit: Foxconn
