Foxconn, known worldwide for its work in the manufacture of electronic devices, is expanding its horizons into the automotive sector, particularly electric cars. The Taiwanese company plans to build a 283-hectare campus in Zhengzhou, China, with the aim of entering into the production of electric vehicles, taking advantage of its experience in the assembly and testing of products such as the iPhone.
This project could change its positioning in a market that is growing rapidly and is estimated to reach a value of 600 billion dollars in the coming years.
Diversification and strategic bets
This move by Foxconn is not the first in the automotive industry. In 2022, it acquired an auto manufacturing plant in Ohio, previously owned by General Motors, marking its formal entry into the field. The company also signed a collaboration agreement with Stellantis in 2021 to design a new generation of microchips.
These chips, vital for electric vehicles, reflect Foxconn’s expertise and capabilities in semiconductor technology, an area in which it also has partnerships with companies such as Nvidia.
Challenges of a saturated market
Although Foxconn is positioning itself with strategic alliances, it faces a considerable challenge in the competitive automotive market, especially due to the presence of Asian brands. In Mexico, for example, the Chinese brand MG leads car sales, with 60,000 units sold in 2023. BYD, another Asian EV brand, is also rapidly gaining ground.
Foxconn focus on software technology
In addition to its foray into car manufacturing, Foxconn is betting on software development. In 2020 it launched MIH, an open platform for electric vehicles, with the intention of becoming the “Android system” of this industry.
MIH lowers barriers to entry for new companies and seeks to create a software-based electric vehicle manufacturing ecosystem, driving innovation and collaboration across the industry.
Foxconn prepares for new global market moves
The competitive environment in the automotive industry continues to evolve. Recently, Nissan and Honda have initiated talks for a possible merger that could create the world’s third largest automotive group.
This move could alter the global landscape and give Japanese brands a strategic advantage over competitors such as Tesla and Chinese automakers. Foxconn is keeping a close eye on this situation, considering its options on possible acquisitions or partnerships, although it is expected to wait for negotiations between Nissan and Honda to progress before making final decisions.
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