a rumor Apple’s electric car project has long excited investors and iPhone enthusiasts. Nearly a decade after details of the project leaked, the Cupertino-mobile remains a myth — but that hasn’t stopped other consumer electronics companies from growing. On the other side of the world, people will soon be able to order cars from the Taiwanese company that has mastered making Apple products in mainland China. Welcome to the age of Foxconn mobile phones.
In October 2021, Hon Hai Technology Group, known internationally as Foxconn, announced plans to partner with Taiwanese automaker Yulon to produce three of its own electric vehicles under the Foxtron name. Foxconn, known for assembling 70 percent of iPhones, has similar ambitions for the auto industry: to be the manufacturer of choice for brand new cars. So far, it has signed deals to build cars for two U.S. electric vehicle startups, Lordstown Motors and Fisker.
Foxconn’s own vehicles — hatchbacks, sedans and buses — don’t particularly exude Apple style, but they represent a giant leap for the consumer electronics maker. Foxconn’s ambitious expansion plans also reflect a larger shift in technology and geography across the auto industry. Over the past 100 years, America, Europe and Japan have defined the car. Now, with electrification, computerization and autonomy, the nature of the car is changing, which means that China may increasingly decide what car manufacturing is.
If Foxconn succeeds in building a major auto-manufacturing business, it will help China become an auto hub capable of surpassing traditional powerhouses such as the United States, Germany, Japan and South Korea. Foxconn did not respond to interview requests.
The automotive industry is expected to undergo a major transformation in the coming years. An October 2020 McKinsey report concluded that automakers will envision new ways to sell cars and generate revenue through apps and subscription services. In some ways, the car of the future sounds a lot like a smartphone on wheels.
That’s part of the reason why there’s no better time for electronics manufacturers to try car manufacturing, says Marc Sachon, a professor at the IESE Business School in Barcelona who studies the automotive industry. Electric vehicle powertrains are simpler than internal combustion engine powertrains, with fewer components and fewer assembly steps. Electric vehicle supply chains are easier to manage than traditional supply chains, which are one of the core competencies of established automakers. Sachon added that China has a strong EV ecosystem, from batteries to software and even component manufacturing.
China is particularly well-positioned to lead electrification. China already has some of the world’s most advanced battery makers, including CATL and BYD, which also makes cars. Automakers in the region may gain an advantage in understanding and exploiting new battery technology simply because of proximity — much in the same way that software companies benefit from proximity to chip design companies.