Foxconn pushes into electric vehicle production near its biggest iPhone plant amid slow smartphone sales
Foxconn Technology Group has set up a new car venture in Zhengzhou city, capital of central China's Henan province and home to the world's largest iPhone factory, as the Apple supplier steps up its efforts in the new energy vehicle (NEV) sector amid declining smartphone sales.
The new firm, named Foxconn New Energy Automobile Industry Development (Henan) Co, was established on January 4 with a registered capital of 500 million yuan (US$70 million), according to public records in the National Enterprise Credit Information Publicity System.
Its business covers car component manufacturing and development, motor production and NEV sales, among other areas.
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Foxconn, known formally as Hon Hai Precision Industry, said the new venture belongs to Foxconn Innovation Industry Development Group Co and aims to sharpen the company's focus on the electric vehicle industry, according to a report by the Securities Times on Tuesday.
Foxconn confirmed the report, adding that the Henan subsidiary was disclosed in December 2023 to the Taiwan Stock Exchange.
The world's largest contract electronics manufacturer is accelerating its move into the automobile industry amid weakening demand for smartphones and consumer gadgets.
The Taiwanese giant last week reported US$198.9 billion in preliminary revenue for 2023, down 7 per cent from 2022. It blamed slow market demand for its static consumer electronics product business in the fourth quarter, while expecting continuing decline in the first quarter of this year.
In October, Foxconn announced a new electric cargo van called Model N and announced plans to mass produce its compact SUV Model B. Jun Seki, its chief strategy officer for electric vehicles, said the company was in touch with about 14 potential customers and saw India and Japan as promising countries for EV development.
To help push the company towards its new direction, Foxconn opened a new global business base in Zhengzhou last April and reaffirmed its commitment to the Chinese market, even as the firm and other Apple suppliers move to diversify their supply chain.
A Foxconn plant in Zhengzhou, Henan province. Photo: Bloomberg alt=A Foxconn plant in Zhengzhou, Henan province. Photo: Bloomberg>
Foxconn plans to start building new factories for smartphones and electronics goods in the cities of Zhoukou, Kaifeng and Jiyuan in Henan, according to a list of major construction projects in 2024 released last week by the provincial Development and Reform Commission.
The company, which was put under a tax and land use investigation in October by mainland authorities, employs 200,000 workers in its Zhengzhou manufacturing complex.
In 2022, that facility was rocked by violent workers' protests and an exodus of tens of thousands of employees that Apple CEO Tim Cook later blamed for a decline in the US company's quarterly revenue.
Separately, Foxconn plans to invest at least US$2.6 billion in a plant it is building in India to make Apple products, according to a report by Bloomberg last month.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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