Foxconn is building partnerships with Japan's Mitsubishi group of companies as the Taiwanese manufacturer works toward a goal of becoming a top assembler of electric vehicles.
In its latest move, Foxconn is poised to buy a stake in Mitsubishi Electric's automotive parts subsidiary, sources told Nikkei on Tuesday.
EVs are supposed to be the next big thing for Foxconn, also known as Hon Hai Precision Industry, which assembles iPhones and artificial intelligence servers as its core business.
Foxconn announced its entry into the EV business in 2019. Since 2022, the group has rolled out buses and passenger vehicles in its home market while exploring business opportunities elsewhere, including Japan, the U.S. and Europe.
The company has pursued a contract design and manufacturing services business model for its EV segment. The aim is to cover everything from vehicle design to sales with its own operations as well as partnerships. This would make Foxconn a one-stop shop that can quickly provide whatever customers need.
One focus is the Japanese market, where EVs have been slow to catch on. Chairman and CEO Young Liu said in an interview last November that he sees all of Japan's top 10 automakers as potential customers.
Mitsubishi Motors became its first partner. Foxconn signed a memorandum of understanding last May to supply EVs to Mitsubishi. The plan is to customize passenger EVs developed by Foxconn and introduce them in the Oceania market in the second half of this year.
In January, the Taiwanese company established a joint venture involving Mitsubishi Fuso Truck and Bus and a Foxconn electric bus subsidiary. Mitsubishi Fuso is majority-owned by Daimler Truck and produces vehicles under the Mitsubishi brand.
The joint venture will make electric buses developed by Foxconn at Mitsubishi Fuso's sole bus factory in Japan.
Foxconn has now set its sights on Mitsubishi Electric Mobility, an automotive components subsidiary of Mitsubishi Electric.
Discussions are underway on a proposal for Foxconn to acquire a 50% stake in Mitsubishi Electric Mobility and jointly operate the company with Mitsubishi Electric. A final decision has yet to be made.
Mitsubishi Electric Mobility has strength in alternators, starters and other components for gasoline-engine vehicles. It is also developing core EV drivetrain components, such as inverters and motors.
Foxconn appears to be interested in acquiring technology that will enable it to manufacture key EV components in-house.
Under Foxconn's contract manufacturing model, the key to success lies in securing a large volume of orders from customers with strong brands, while reducing assembly costs through mass production.
To achieve cost reductions and improve efficiency, Foxconn has been working to produce its own EV components. In Taiwan, Foxconn has laid the groundwork for in-house production of batteries and power semiconductors, which are essential for EVs.
Meanwhile, the company has been hunting for external technologies. In 2024, it acquired a 50% stake in the chassis systems subsidiary of the ZF Group, a leading German auto supplier.
For Foxconn, which is working to expand its customer base despite a limited track record in EVs, a collaboration with the globally recognized Mitsubishi brand could provide a boost.