Foxconn, the Maker of iPhone, Accelerates 'Electric Vehicle' Business

Establishment of Subsidiary in Zhengzhou
Investment of 91.9 Billion KRW in Capital

Taiwanese Foxconn, Apple's largest partner, is accelerating its electric vehicle business by establishing a subsidiary related to electric cars.

According to China's First Financial Daily on the 9th, Foxconn New Energy Automobile Industry Development Co., Ltd. was established in Zhengzhou, Henan Province. The capital is 500 million yuan (approximately 91.9 billion KRW), and the registered business scope includes manufacturing of automobile parts and accessories, motor manufacturing, research and development of new material technologies, sales of new energy vehicles, and supply chain management services.

[Image source=Reuters Yonhap News]

The company was established with 100% investment from Foxconn New Business Development Group, a subsidiary of Foxconn's Hongfu Jin Precision Electronics located in Zhengzhou. Foxconn New Business Development Group opened in Zhengzhou in April last year.

Foxconn announced last year that it would establish a new business headquarters in Zhengzhou and develop new businesses including new energy vehicles and batteries. In November of the same year, its subsidiary 'Foxtron' was listed on the Taiwan Stock Exchange. However, it plans not to put its own name directly on vehicles but to manufacture vehicles under other brands on consignment.

Foxconn has been steadily investing in electric vehicles as a new industry for the company. In 2022, it acquired the Ohio factory of the American electric pickup truck startup Lordstown Motors for $230 million, and in November of the same year, it established an electric vehicle joint venture with Saudi Arabia's Public Investment Fund (PIF). Following the first announcement of three electric vehicle models in October 2021 ? Model C (SUV), Model E (sedan), and Model T (electric bus) ? it launched Model B (crossover SUV) and Model V (electric pickup truck) in October 2022.

The market also expects that Foxconn's entry into the electric vehicle market could accelerate the launch of the 'Apple Car' in the future. Since Foxconn, Apple's largest partner, is already producing electric vehicles, it is believed that leveraging their technology and workforce could enable a rapid business launch. However, Apple has not yet disclosed any specific plans or policies regarding the release of an electric vehicle.

Meanwhile, this attempt by Foxconn is drawing more attention as it is happening amid recent poor performance. According to Foxconn, the company's revenue in the fourth quarter of last year was $59.5 billion (approximately 78.5281 trillion KRW). Sales in December alone were $14.84 billion, a sharp decline of 27% compared to the previous year. Foxconn reported sluggish smart appliance sales due to weakened demand and expects that sales in the first quarter of this year will also decline compared to last year.