iPhone Assembler Foxconn in Talks With Saudi Arabia to Build Electric Vehicles
Apple's contract manufacturer Foxconn Technology Group is best known for assembling tens of millions of Apple products, including the popular iPhone. But the company is looking for new ways to diversify its business as smartphone sales decline, which might include assembling electric vehicles for other companies.
As the global auto industry shifts towards electrification, cars are essentially becoming computers on wheels, so it makes sense for Foxconn, which is one of the world's biggest electronics manufacturers, to start building electric cars. That might happen in Saudi Arabia, according to a report from Bloomberg.
Bloomberg reported on Thursday that Saudi Arabia and Foxconn are in talks to form a joint venture to make electric vehicles, which will help the oil-rich country diversify its economy, according to people familiar with the matter.
Saudi Arabia's Public Investment Fund (PIF), which manages roughly $450 billion of assets, will create a new entity named "Velocity" to be the majority stakeholder of the joint venture, said two of the people, who asked not to be named because the effort is not yet public, Bloomberg reported.
As part of the deal, Foxconn will provide software, electronics and the electrical architecture for the new EVs and will be a minority stakeholder in the collaboration, according to one of the people. The deal might help the country gain experience in manufacturing electric cars, another person said.
The joint venture is looking to assemble EVs on a chassis licensed from BMW, two of the people said. The deal could be finalized by the end of the year. However, sources told Bloomberg that no agreement has been made and the plans could change.
Foxxonn has been exploring the possibility of building EVs for automakers since at least last year.
In Oct 2020, Foxconn announced that it aims to provide components or services to around 10% of the world's electric vehicles (EVs) between 2025 and 2027. But now it appears the company's plans are bigger.
Foxconn unveiled three electric vehicle prototypes this past October at its annual Foxconn Technology Day event in Taipei. The three battery-powered vehicles are designed for mass production. The reference designs allow EV companies to customize the vehicles to their own specifications.
The EVs were manufactured by Foxtron, a joint venture between Foxconn and Yulon Motor, a Taiwanese automaker that produces Nissan and Mitsubishi cars for the local market.
The three EV prototypes are based on the designs of the MIH Consortium, a Foxconn-led open software and hardware platform. The open hardware and software platform is called the "MIH EV Open Platform." It includes an EV chassis, electronic architecture and support for autonomous driving.
Foxconn aims for its electric vehicle production to become a $35 billion business by 2026. The company's Chairman Young Liu said to news outlet Nikkei Asia in October that Foxconn's $35 billion target is a goal it "must achieve."
With billions in assets, Saudi Arabia's PIF is a major investor in clean energy technologies, including electric cars. The fund invested $1 billion in Lucid Motors in 2018, which helped the company build its factory in Arizona and launch the Lucid Air sedan. The PIF holds a 62.7% stake in Lucid and encouraged the company to set up an EV factory inside the kingdom, according to Bloomberg.
Earlier this year, Saudi Arabia hired advisers including Boston Consulting Group to explore establishing its own domestic electric car company, Bloomberg News has reported earlier.
EV startup Fisker Inc. announced earlier this year that Foxconn will build its second electric vehicle. Fisker announced in February that it entered into a MOU with Foxconn to develop what it calls a "breakthrough electric vehicle" codenamed "Project PEAR" (Personal Electric Automotive Revolution). Projected annual volumes are more than 250,000 vehicles a year. Production of the new Fisker EV is planned for Q4 2023.
Last month, struggling electric truck startup Lordstown Motors entered into an agreement with Foxconn for it to purchase Lordstown Motors' factory in Lordstown, Ohio. The factory was a former General Motors assembly plant. As part of the deal, the two companies will enter into a strategic partnership to build EVs.
The Saudi Arabian Public Investment Fund (PIF) was established in 1971 to provide financing support for projects of strategic significance to the national economy. The PIF invests in the fields of telecoms, aerospace and green technologies, such as electric cars, with a focus on renewable energy and information technology.
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