Foxconn Makes Major Investment in Electric Vehicle Battery Plant to Expand Business Beyond Apple iPhones
Foxconn Technology Group, a key supplier to Apple, is venturing into the electric vehicle (EV) market with a substantial investment. The company, also known as Hon Hai Precision Industry, has disclosed an US$82 million (600 million yuan) investment in a new EV battery plant in Zhengzhou, Henan province, China. This move signifies Foxconn's commitment to diversifying its operations beyond its primary focus on iPhone manufacturing in the region.
The investment, revealed in a filing to the Taiwan Stock Exchange, underlines Foxconn's long-term dedication to its EV aspirations. The newly established Foxconn New Energy Battery (Zhengzhou) division, initiated in October last year, is overseeing the project. The initial phase of the investment, amounting to 350 million yuan, is managed by the Foxconn New Business Development Group, which wholly owns the EV battery unit.
In a strategic shift to broaden its revenue streams, Foxconn is expanding into emerging sectors such as semiconductors, EVs, and robotics. The establishment of the Foxconn New Business Development Group in June last year, with an initial capital of 1 billion yuan, underscores the company's focus on EV battery production and sales.
The construction of the division's headquarters, spanning 70,000 square metres, is already in progress in Zhengzhou. Foxconn has introduced various EV models, including the Model C family SUV, Model D multipurpose vehicle, and Model U mid-sized electric bus. Jun Seki, head of Foxconn's EV business, aims to capture 5% of the global EV manufacturing market by next year.
Despite facing challenges in iPhone production due to a COVID-19 outbreak in late 2022, Foxconn remains committed to Zhengzhou. The company experienced disruptions, leading Apple to diversify its production locations to India and Vietnam. Foxconn's chairman, Liu Young-way, reaffirmed the company's dedication to Henan province during a visit in July, announcing the launch of a trial EV manufacturing centre.
While heavily investing in China, Foxconn is also expanding its global footprint. In 2022, the company acquired an EV facility in Ohio from Lordstown Motors to bolster its presence in the United States. This international expansion aligns with Foxconn's goal to establish itself as a prominent player in the EV industry while reducing its reliance on iPhone manufacturing.
With this significant investment, Foxconn is adapting to evolving market trends and strengthening its position in emerging industries.
Foxconn invests US$82 million in a new EV battery plant in Zhengzhou, China.
The company aims to diversify revenue sources by expanding into EVs, semiconductors, and robotics.
Foxconn plans to secure 5% of the global EV manufacturing market by next year.
Source: TECHEDT