Foxconn aggressively carving out a niche in APAC EV industry, says GlobalData

The rapid growth of electric vehicles (EVs) has transformed the traditional automotive industry business due to the merging boundaries between automotive technology, electronics and information & communication technology. Over the past few years, technology companies, such as Foxconn have been aggressively trying to carve out a niche in the Asia-Pacific (APAC) automotive industry with their products and services in the EV segment, says GlobalData, a leading data and analytics company.

With the launch of software and hardware open electric vehicle platform ‘MIH’, Foxconn aims to become ‘android’ of the EV industry and avail manufacturing of various EVs for third parties on its scalable and customizable platform. It has partnered with key automakers in this regard which includes Geely, Byton, Stellantis and Fisker. Additionally, it also aims to launch its own EV brand and supply key hardware and software for EVs.

Bakar Sadik Agwan, Senior Automotive Analyst at GlobalData, comments: ‘‘Foxconn entry is expected to disrupt the APAC EV market. While the traditional automakers are on their transition towards electrification with their set targets, tech companies such Foxconn invading the EV business should be a key concern. Manufacturing capabilities, deep roots in the electronics industry and orchestrated supply chains leave no major challenges for Foxconn to manufacture a vehicle and compete with established brands.

“Foxconn manages an entire ‘vertically integrated’ supply chain in the electronics industry which includes chipsets – a key component for EVs. This will ensure adequate supply for its future EVs. It has also invested in battery makers developing the ‘next-gen’ solid-state batteries. The company aims to commercialize solid-state batteries for EVs by 2024. These will offer Foxconn significant competitive benefits over other automakers.”

Hence, this should be a concern as it may nibble away established brands through acquisitions and vertical integration. The growing tech-company dominance in EVs is a wake-up call for the global OEMs, and there is a need to increase the pace of the EV transition.

Mr Agwan concludes: “However, it is also important to note that Foxconn is fairly new in the EV market while traditional OEMs have been exploring the area for nearly two decades and possess strong brand equity. Foxconn entry in the EV market is of high importance for the APAC market which is still in its early stages of EV adoption.”

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