Foxconn Will Manufacture Mitsubishi Electric Vehicles

Taiwan’s Foxconn is close to a deal with Mitsubishi Motors to produce electric vehicles, which is a significant move for the iPhone supplier’s efforts to break into the automotive industry.

People familiar with the matter said the world’s largest contract electronics manufacturer is set to announce a deal in the coming weeks to produce electric vehicles for Japanese automaker Mitsubishi, allowing the latter to expand its range of lower-priced models.

Bringing in a contract electronics manufacturer to build electric vehicles would also mark a major shift for the auto industry as it battles China’s dominance in software-heavy battery-powered cars.

Mitsubishi Motors, which has been considering a deal with Foxconn for some time, sees advantages in reducing its development and production costs by partnering with the Taiwanese group and the possibility of increasing its car lineup, one of the sources said.

The Japanese automaker declined to comment on the partnership with Foxconn, but said it would “continue to explore opportunities for collaboration with various partners to achieve sustainable growth.” Foxconn declined to comment on the deal.

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Teaming up with a well-capitalized company with roots outside the automotive sector is an alternative path for an industry that has so far focused on large mergers, alliances and project partnerships between automakers.

The agreement comes after merger talks between Honda and Nissan, Mitsubishi Motors’ second-largest shareholder, collapsed.

The Japanese auto mega-deal was triggered by Foxconn’s attempts by Nissan’s partner Renault to take a stake in the struggling Japanese automaker.

The deal with Mitsubishi could give Foxconn another chance at an alliance with Nissan, but the prospects remain uncertain as Nissan is in the process of appointing a new CEO to lead the group out of its financial crisis.

Foxconn Chairman Young Liu told investors earlier this month that a cooperation agreement with the Japanese automaker was expected to be “signed in a month or two,” but he did not name a partner at the time.

The Taiwanese group, which manufactures components and assembles electronic devices ranging from smartphones to robots for customers around the world, has been building a business in contract design and manufacturing of electric vehicles since 2019 to become the “Android of electric vehicles.”

The company’s experience in supply chain management and rapid production scaling for new models would allow it to help automakers shorten development times, reduce production costs and bring products to market much faster, Liu said.

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