Taiwan’s Foxconn to tie up with FCA in electric vehicle push
Leading assembler of Apple’s iPhone has sought to diversify its revenue streams
Foxconn Technology Group intends to make a big push into electric cars through a joint venture with Fiat Chrysler Automobiles, as the leading assembler of Apple’s iPhone seeks new sources of growth and profits.
Hon Hai Precision Industry, as the world’s largest contract electronics manufacturer is formally known, is in talks to set up a business with the Italian-American automaker. The venture would develop and manufacture electric cars in China and run networks of connected wireless vehicles, the company said in a Taiwan Stock Exchange filing late on Thursday.
The tie-up would mainly focus on the Chinese market, a Hon Hai executive said. Hon Hai and FCA are each set to hold 50 per cent in the new company. The executive said he expected a contract between the two to be signed in the first quarter.
The venture would fit into Foxconn’s long running campaign to diversify its business. The company depends on Apple for almost 50 per cent of its revenues, but growth and profits from smartphones have increasingly been outpaced by those from electric car components and assembly, robotics and healthcare.
Foxconn has tried for almost a decade to make inroads into automotive electronics, but revenues from the segment have been small. The group has invested in several Chinese companies involved in transportation and electric cars. They include ride-hailing group Didi Chuxing, batterymaker CATL, and electric vehicle companies Byton and Xpeng Motors.
Foxconn intends to pitch itself as a manufacturer of modules and components for electric vehicle makers, according to plans discussed by company executives.
News of a tie-up comes a month after FCA agreed to merge with France’s PSA. The deal will create the world’s fourth-largest automaker and could boost FCA’s development of electric vehicle technologies.
FCA will launch its first fully electrically powered vehicle this year. It has previously focused less on electric cars than some competitors, but has changed course to comply with Chinese policies aimed at lowering emissions.
The Chinese government has pressured automakers to build more battery-powered cars, despite phasing out some subsidies for clean energy vehicles. Chinese electric vehicle sales fell for the sixth straight month in December.
An FCA spokesperson in China did not immediately respond to a request for comment.