Foxconn thinks manufacturing an EV is harder than the iPhone

Foxconn thinks manufacturing an EV is harder than the iPhone

Over the past decade, Foxconn Technology Group has followed increasingly complex plans from Apple Inc to turn silicon, glass, plastic, copper and other materials into hundreds of millions of iPhones. And Apple is just one of dozens of A-list customers of the Taiwanese company; Google, Microsoft, Sony and many others have hired it to make phones, computers, tablets, game consoles, servers and more. So it’s not too farfetched to think that Foxconn could do the same for cars.

So far, though, cars are turning out to be a tougher slog compared to electronic gadgets.

Last year, Foxconn paid $230 million for a former General Motors Co. factory in Lordstown, Ohio, with the aim of making it the center of a US auto-manufacturing push. As part of the deal, four-year-old Lordstown Motors Corp, the previous owner of the 6.2 million-square-foot plant, hired Foxconn to build its Endurance pickup truck and the Taiwanese company took a stake in the startup.

Foxconn has made promising predictions for its auto business, saying it will generate $33 billion in annual revenue by 2025. And it has announced partnerships in Taiwan, Thailand and Saudi Arabia. While its electric vehicle components business is on track to grow fivefold this year to more than $3 billion, the vehicles Foxconn has built at this point are a few prototypes, a few dozen electric buses and about 40 pickups for Lordstown.

Foxconn’s entry into EVs

  • May 2022: Completed deal with Lordstown Motors to acquire the Ohio factory for $230 million.
  • October 2022: Unveiled two EVs to be manufactured in Taiwan, Thailand and the US.
  • November 2022: Joins hands with Saudi Wealth Fund to make EV
  • November 2022: agrees to invest as much as $170 million in Lordstown and takes two board seats.
  • January 2023: Hires former Nissan executive Jun Seki as chief strategy officer for EVs.

In January, Lordstown asked Foxconn to suspend production because the cost of making the truck exceeded its targeted selling price of $65,000. A few weeks later it became clear that Stamina suffered from a lack of stamina. At least one owner reported that the truck lost power while driving in cold weather, leading to a company recall in February. Then on March 6, Lordstown said it would be forced to discontinue its only model pickup if it could not team up with an experienced automaker.

The announcement raises questions about Foxconn’s nascent EV business. Lordstown was effectively saying that Foxconn could not keep its flagship vehicle in production despite its vast resources, its expertise in turning ideas into products and the decades it took to get those products out the factory door on time and on cost. struggled in global supply chains. “Why does Lordstown need another strategic partner to make the ill-fated project a success?” asks Danny Hewson, an analyst at brokerage AJ Bell. “Is it because Foxconn isn’t ready to become an EV powerhouse without outside help?”

Foxconn says it remains committed to its EV plans and that its experience in electronics sets the stage for success in cars. But while Lordstown has promised to continue developing new vehicles with the Taiwanese company, the track records of other potential customers show that Foxconn is far from realizing its e-car dreams. “You need people skilled in mass production,” says Ron Harbor, an independent industry manufacturing consultant. “It can be done, but I haven’t seen one demonstrated by startup electric car companies. I would call it a long shot.

The closest to production is Monarch Tractor, which last August hired Foxconn to build autonomous electric farm vehicles. Monarch makes them in limited numbers at a facility in Livermore, California, and the companies plan to move production to Lordstown by the end of March.

Less certain is Fisker Inc. The $30,000 EV with the Foxconn Los Angeles company is known as a Pear. Fisker says it fully expects Foxconn to build the car, but the two companies are still negotiating costs, according to people familiar with the matter. And in September, Foxconn signed a preliminary agreement with IndiEV, another startup in California. At the time, Foxconn called the prospect of the company building the prototype a “success story”. But at the end of September, IndiEV had less than $220,000 in the bank. The company now says it aims to go public in a reverse merger, but if it doesn’t complete that process by July, it risks going out of business.

Those collaborations could still be successful, and Foxconn could find other companies that want it to build its vehicles. But a site in Mount Pleasant, Wisconsin, suggests what may lie ahead. It was here, in June 2018, that Foxconn executives and then-President Donald Trump held a groundbreaking ceremony for what would become a $10 billion, 20 million-square-foot LCD-panel factory, which Trump described as the “Eighth Wonder of the World.” ,

Over the next two years, Foxconn repeatedly downplayed its ambitions. Foxconn renegotiated its contract with the state through 2021, after originally promising to create 13,000 jobs at the site. The company today says it has invested more than $1 billion and employs nearly 1,000 people. Those guys are making electronics like computer servers, and Foxconn plans to add components for battery packs at the Wisconsin site to strengthen ties with both existing automakers and startups. Still, Foxconn’s record in Wisconsin is a red flag, says Michael Shields, a researcher at Policy Matters Ohio, a nonprofit that evaluates the economic impact of large industrial investments in the state. “I think there is cause for concern,” he says, “about what’s going to happen at Lordstown.”

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