Foxconn, best known as the maker of the iconic Apple iPhone, is looking to enter the electric vehicle (EV) manufacturing space in India, according to people directly in the know who said the Taiwanese contract manufacturer has been in talks with some state governments to further its plans.
In its annual report, published on May 31, Foxconn said that India will assist with the establishment of a production line this year to provide two-wheeled EV manufacturing services that will cater to the EV two-wheeler market in Southeast Asia.
This marks the first instance where the Taiwanese company has explicitly stated its plans to further its EV manufacturing ambitions in India.
Sources also told ET that an Indian delegation is set to visit Taiwan soon and would meet with Foxconn executives to discuss the company’s EV plans.
“It is still unclear if Foxconn will do contract manufacturing for multiple brands or for a single brand through the JV (joint venture) route,” said one of the people cited above.
“They have a tie-up with Ather Energy (electric scooter maker) but it is likely that they will look for a partner when they come into the space — possibly with one of the (Indian) auto giants — like they did for semiconductors,” the person added.
In February 2022, Vedanta and Hon Hai Technology Group (Foxconn) had announced a JV to manufacture semiconductors in India.
‘Company aims to be Android of EV ecosystem’
Meanwhile, officials from four states — Maharashtra, Telangana, Tamil Nadu and Andhra Pradesh — had met top Foxconn executives during their visit to the country last year to discuss EV manufacturing plans, sources said.
A person in the know of Foxconn’s thinking on the matter said that while the company is keen on Maharashtra as a base for EV manufacturing, “there were some challenges that cropped up. So they might consider Tamil Nadu as it has an auto manufacturing hub and Foxconn already has a presence in the state”.
The company is also looking at Telangana as it is “the most active state in terms of outreach and incentive”.
ET’s e-mailed queries to Foxconn on its EV manufacturing plans did not elicit a response until press time.
Last year, during Foxconn Chairman Young Liu’s first visit to India, Prime Minister Narendra Modi tweeted that the Taiwanese company’s “push for EV manufacturing is in line with our commitment of Net Zero Emission”.
To be sure, Bharat FIH, which is a Foxconn Technology Group company, had said that it has commenced business with companies such as EV makers Ather Energy and Ola Electric. It also mentioned other players like consumer electronic company Vu Technologies Private and ZTE Telecom India (telecom and networking products), and wearables maker Imagine Marketing (boAt), in its draft red herring prospectus dated December 21, 2021.
Mobility Push
Pointing out that “mobility is a new space for Foxconn”, Neil Shah, vice president of research at Counterpoint Research, said the contract manufacturer is adopting the “Build-Operate-Localise (BOL) model” in EV manufacturing.
“They want to become the Android of the EV ecosystem,” he added.
The company will look to build a vertical platform including manufacturing, hardware, component manufacturing, and battery management. And then partner with local firms through its MIH (Mobility in Harmony) platform.
Foxconn’s MIH Consortium is an open EV alliance that promotes collaboration in the mobility industry.
The company’s latest annual report — reviewed by ET –says that it will cooperate and strive with more than 1,500 member companies at home and abroad “to become the Android platform of the electric vehicle industry”.
Shah is of the view that the Taiwanese manufacturer is looking to break the slowness in the automotive industry dominated by a few OEMs which control most of the R&D and supply.
“It is a closed ecosystem and Foxconn wants to open it up by leveraging local partnerships and local suppliers in markets like India, Indonesia, and Europe, and expand their manufacturing,” he added.
Global Moves
Foxconn, which gained global recognition for being Apple’s largest contract manufacturer, now has its eyes fixed on the mobility space. Currently, it has car projects running with the Yulon Group in Taiwan, with Fisker Inc. and Lordstown Motors in the US, and with state oil company PTT in Thailand, among others. In November 2022, it announced that it was teaming up with the Saudi Public Investment Fund to create a new EV brand called Ceer.
Experts said that India’s large consumer market, favourable demographics, and government initiatives like “Make in India” are drawing several companies to invest in manufacturing facilities within the country.
“India is expected to become a sizeable EV market (USD 100B+ opportunity by 2030 across value chain) driven by strong domestic demand, favorable regulatory environment and OEM push,” said Deepak Jain, Partner, Bain & Company.
“A strong talent base and well-established automotive manufacturing sector indicate strong potential to become an EV manufacturing hub. Entry of low-cost contract manufacturers will be a definite boost for E2W (electric two-wheeler) players struggling to scale,” he added.
Foxconn said in addition to the automotive strategy, it is also focused on the development of EV components.
