Investors and iPhone aficionados have long been enthused by rumors of an Apple electric vehicle initiative.
The Cupertino-mobile is still a fiction almost ten years after information about the project first surfaced, but it hasn’t stopped other consumer electronics businesses from moving forward. Soon, customers on the opposite side of the globe will be able to order a car from the Taiwanese business that mastered producing Apple products in China. Welcome to the Foxconn-mobile era.
Hon Hai Technology Group, also known as Foxconn worldwide, announced intentions to construct three of its own electric cars in cooperation with Taiwanese automaker Yulon under the brand name Foxtron in October 2021. Foxconn, which is best known for producing 70% of iPhones, has similar goals for the auto industry, including being the go-to producer for an entirely new class of vehicle. As of now, it has agreements in place to produce vehicles for Lordstown Motors and Fisker, two US-based EV companies.
Although the hatchback, sedan, and bus produced by Foxconn don’t particularly exude Apple cool, they mark a significant advancement for the maker of consumer electronics. The ambitious expansion plan by Foxconn is also a reflection of a larger shift in technology and location in the automotive industry. For the past 100 years, the US, Europe, and Japan have established what a car is. Now that the automobile is evolving due to growing electrification, computerization, and autonomy, China may have a greater say in what cars are made.
If Foxconn is successful in establishing a sizable vehicle manufacturing enterprise, China will become an automotive epicenter that can rival the established automotive powerhouses of the US, Germany, Japan, and South Korea. When contacted for an interview, Foxconn did not answer.
In the upcoming years, the vehicle industry is anticipated to go through significant changes. According to a McKinsey report released in October 2020, automakers will come up with innovative ways to sell cars and generate income through subscription services. The future automobile resembles a smartphone on wheels in several respects.
In part because of this, argues Marc Sachon, a professor at Barcelona’s IESE Business School and an expert on the automotive sector, there has never been a better time for an electronics giant to try their hand at building automobiles. Electric car powertrains are easier to assemble and have fewer parts than internal combustion vehicle powertrains. The conventional supply network, which is one of the key strengths of well-known automakers, is more difficult to manage than the EV supply chain. The fabrication of components as well as the development of batteries and software all take place in China, according to Sachon.
China is ideally situated to take the lead in the electrification effort. The nation already boasts some of the most cutting-edge battery producers in the world, including CATL and BYD, the latter of which also makes automobiles. Simply by virtue of proximity, car manufacturers in the area may have an advantage in understanding and utilizing new battery technology, much as how software companies profit from being close to chip design companies.