(Bloomberg) — Foxconn Technology Group will decide between Wisconsin and Mexico for the site of its first electric-car plant this year, making a big bet on the nascent business at a time when technology giants including top customer Apple Inc. are looking to expand into vehicles.
The Taiwanese manufacturer already has operations in the central U.S. state and the Latin American country, and could utilize its existing structures, Chairman Young Liu of Hon Hai Precision Industry Co., Foxconn’s flagship unit, said in a briefing in Taipei on Tuesday. Availability and affordability of skilled labor and engineering talent will be among the deciding factors, he said.
Foxconn, the world’s largest assembler of iPhones, is hoping to replicate its smartphone success by building clients’ electric vehicles from the chassis up. Amid reports of Apple’s car project gaining momentum, Foxconn has bulked up its automotive capabilities, aiming to become a contender in the race to make vehicles for the U.S. giant.
“Foxconn is the new kid in town,” the chairman told reporters. “We are going to build our capability, so our potential customers will feel comfortable and give us products to make.”
Liu said the company is working on finalizing a joint-venture agreement with Fiat Chrysler Automobiles, now part of Stellantis NV. He refused to be drawn into Apple speculation, saying only that the widely reported car project was “a rumor.”
Foxconn is talking to U.S. electric-car companies that it hasn’t announced deals with yet, Liu said. He reiterated the manufacturer targets a 10 percent market share in electric cars, and said the company could deliver a solid-state battery earlier than its originally stated goal of 2024.
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The company in October introduced its first-ever EV chassis and a software platform aimed at helping automakers bring models to the market faster. Last month, Liu said two light vehicles based on the platform would be unveiled in the fourth quarter, with Foxconn also planning to help launch an electric bus around the same time.
Foxconn is pivoting toward vehicles as smartphone growth is stalling. Global production volume of mobile devices, a core business for Foxconn, has fallen for three years starting in 2018, though it is set to rebound this year as demand recovers following the coronavirus pandemic, according to Taiwanese research firm TrendForce.
In contrast, the electric-vehicle industry is growing fast. Global sales of EVs probably reached nearly 2.5 million in 2020, and are set to rise by about 70 percent in 2021, IHS Markit predicted in January. In 2025, global sales will top 12.2 million, indicating compound annual growth of nearly 52 percent, the research firm said in a December forecast.
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In January, Foxconn signed a manufacturing deal with embattled Chinese electric-vehicle startup Byton Ltd. with the aim to start mass production of the Byton M-Byte by the first quarter of 2022. A week later, Foxconn and Zhejiang Geely Holding Group Co. said they would be joining forces to provide production and consulting services to global automotive enterprises.
Last month, Foxconn inked another deal with American EV startup Fisker Inc. on a car that will be built by the Apple partner and target multiple markets including North America, Europe, China and India. Production of the vehicle, which will be sold under the Fisker brand, is set to start in the fourth quarter of 2023.
In October, Foxconn Technology Group’s request for tax credits from Wisconsin for a factory there was rejected by the state, which said the electronics manufacturer fell far short of the promises it made nearly four years ago for a $10 billion plant the company proposed to build there to manufacture TV screens and other electronic components.
In a letter to the company, the Wisconsin Economic Development Corporation wrote that Foxconn isn’t producing the large-sized TV display panels outlined in the original contract, hadn’t invested the pledged amount in the plant and failed to employ even the minimum number of people needed to get subsidies.
The decision was a blow to Foxconn, which announced the high-profile deal in July 2017 with then-President Donald Trump. The manufacturer promised to bring 13,000 factory jobs to Wisconsin in exchange for billions in government subsidies. At a ground-breaking in June 2018, Trump touted the proposed factory as “the Eighth Wonder of the World.”
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