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If you turn Foxconn Technology Group’s latest product sideways, it looks remarkably like the smartphones the Taiwanese company makes for Apple Inc. Except the electric bus, a sleek, shiny vehicle with rounded corners and no mirrors, heralds the firm’s slow and deliberate journey away from that one famous client to which it’s become addicted.
Separating the rise of Foxconn from the success of the iPhone is impossible. With $98 billion in orders, Apple accounted for 54% of revenue at Foxconn’s flagship Hon Hai Precision Industry Co last year. The US tech giant relies on the Taipei-based manufacturer’s assembly and supply chain prowess to keep churning out devices year after year, even when a pandemic throws the industry upside down. But it would be wrong to correlate Foxconn’s bold move into EVs as a way to ensure it becomes the production partner for some
future electric car that everyone seems to be talking about, but which Apple hasn’t even confirmed exists.
Foxconn’s automobile ambitions are less about front-running Apple’s vehicle plans and more about running away from Apple itself. With no mention of an iCar, Foxconn this week unveiled three fully developed vehicles: the Model C SUV, the Model E sedan and Model T bus (and claimed the naming convention had nothing to do with the famous Tin Lizzie developed by Ford Motor Co) Impressive features include the Model E’s race-car level acceleration and a 750-kilometre (470 mile) range.
Foxconn executives aren’t blind to the fact that their company’s business is inexorably tied to a single client and one key product. Apple, too, would prefer to have more vendors to choose from, which is why it’s been sending more orders to contract manufacturers Pegatron Corp and Wistron Corp. But their very size and complementary skillsets means that, at least for now, Foxconn and Apple are stuck with each other.
Rethinking the way the world designs, manufactures, and uses automobiles offers both companies a catalyst for change. Sales of electric passenger vehicles could climb to more than 8 million units in 2025, Bloomberg NEF estimates. That translates into a potential market of close to
$200 billion for Foxconn’s automotive business, double what it made last year
from Apple, according to Bloomberg Intelligence.
Crucially, Foxconn has already shown that its EV plans are viable even if Apple never comes to market. Its first customer is Taiwan’s Yulon Motor Co, a 68-year old company that’s made cars both for Nissan Motor Co and its own brands.
—Bloomberg