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Foxconn makes new inroads into EV sector, looks beyond Apple to carve out a new path for growth

At present, the global tech giant is primarily known to provide technology and hardware support to global smartphone maker, Apple

In one of the biggest diversification, global Taiwan-based smartphone chip maker Foxconn is busy exploring new pastures to diversify its tech journey into a new era. The global tech giant that is primarily known for supplying its technology and hardware support to top smartphone makers Apple is set to begin its new journey into one of the most prominent sectors — the electric vehicle market.

In line with the plan, the company unveiled its first three electric vehicle prototypes. The vehicles — an SUV, a sedan, and a bus — were made by Foxtron, a venture between Foxconn and Taiwanese car maker Yulon Motor Co Ltd.

Foxtrot Vice-Chairman Tso Chi-sen said that he hoped electric vehicles would be worth a trillion Taiwan dollars to Foxconn in five years’ time – a figure equivalent to around $35 billion. Formally called Hon Hai Precision Industry Co Ltd, the world’s biggest electronics contract manufacturer aims to become a major player in the global EV market though concedes it is a novice in the car industry.

It first mentioned its EV ambitions in November 2019 and has moved relatively quickly, this year announcing deals to build cars with U.S. startup Fisker Inc and Thailand’s energy group PTT Pcl.

“Hon Hai is ready and no longer the new kid in town,” Foxconn Chairman Liu Young-way told the event timed to mark the birthday of the company’s billionaire founder Terry Gou, who drove the sedan onto the stage to the tune of ‘Happy Birthday’.

The sedan, which was jointly developed with Italian design firm Pininfarina, will be sold by an unspecified carmaker outside Taiwan in the coming years, while the SUV will be sold under one of Yulon’s brands and is scheduled to hit the market in Taiwan in 2023.

Meanwhile, the bus, which will carry a Foxtron badge, will start running in several cities in southern Taiwan next year in a partnership with a local transportation service provider.

“So far Foxconn has made pretty good progress,” Daiwa Capital Markets tech analyst Kylie Huang said. Foxconn has also set itself a target of providing components or services for 10% of the world’s EVs between 2025 and 2027.

This month the company bought a factory from US startup Lordstown Motors Corp to make electric cars. In August it bought a chip plant in Taiwan, aiming to meet future demand for automotive chips.

A successful push by contract assemblers into the car industry has the potential to bring in a slew of new players and undermine the business models of traditional car companies. Chinese automaker Geely this year also laid out plans to become a major contract manufacturer.

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