Taiwan’s Foxconn, known for being the assembler of Apple’s iPhones, is making a strategic move into the electric vehicle (EV) industry. The company plans to build “AI factories” in collaboration with American chip giant Nvidia, using Nvidia’s chips and software to enhance its EV manufacturing capabilities. Foxconn Chairman Young Liu and Nvidia CEO Jensen Huang made the joint announcement in Taipei.
According to Huang, the partnership marks the beginning of a new computing revolution. The duo believes that large computing systems powered by advanced chips can develop software platforms for the next generation of EVs by learning from everyday interactions. Liu stated that Foxconn is transitioning from a manufacturing service company to a platform solution company.
Foxconn’s entry into the EV market is part of its efforts to diversify its business. The company has expanded into new industries such as digital health and robotics. Analysts see the move as a logical diversification, considering that the smartphone market, where Foxconn established its presence, is reaching saturation.
Kylie Huang, a Taipei-based analyst at Daiwa, believes that if Foxconn can tap into the EV business successfully, it could become influential in the next couple of years. During last year’s tech day, Liu expressed the company’s ambition to build 5% of the world’s electric cars by 2025 and eventually produce up to 40% to 45% of EVs globally.
However, Foxconn’s foray into the EV industry has not been without challenges. Last year, the company bought a factory from Lordstown Motors in Ohio that used to produce small cars for General Motors. The partnership ended in June, with Lordstown Motors filing for bankruptcy protection and suing Foxconn for “fraud” and failing to meet investment promises.
Despite these setbacks, Foxconn remains committed to its expanded ambitions. The company has hired two new chief strategy officers for its EV and chips businesses and formed partnerships with major players in the industry. Bill Russo, founder of Shanghai-based consulting firm Automobility, believes that Foxconn’s background in consumer electronics could give it an advantage in producing innovative EV products compared to traditional automakers.
As Foxconn embarks on its journey to become a leading player in the EV market, its partnership with Nvidia and its expertise in manufacturing could propel its success. With its focus on AI and advanced computing systems, Foxconn is well-positioned to contribute to the development of the next generation of electric vehicles.
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