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Hon Hai Precision Industry Co., which trades as Foxconn Technology Group, has said it will develop an electric vehicle with Fisker Inc., as part of the manufacturer’s efforts to boost its automotive capabilities.

The move comes at a time when technology companies including the Taiwanese firm's main customer, Apple Inc., are looking to expand into vehicles.

The car will be built by Foxconn, targeted at multiple markets including North America, Europe, China and India, and sold under the Fisker brand, according to a joint statement from the companies Wednesday. Production is set to start in the fourth quarter of 2023.

Fisker is looking to break new ground with its second planned model. The startup intends to make a vehicle that doesn’t fit into an existing segment, such as that of a sedan or SUV.

Its partnership with Foxconn, a smartphone-maker new to the auto business, is pinned on hopes that the collaboration will foster innovative manufacturing.

"The auto industry is very stale,” said founder Henrik Fisker in an interview. "We still talk about adopting the Toyota manufacturing system,” referring to the production and logistics concept developed decades ago.

Fisker plans to design and market the vehicle while Foxconn will supply the skateboard chassis and manage supply chain and assembly. That’s asking a lot of a company that has never built cars in large volume before.

"I have full confidence that they can do this and maybe have ideas that are outside the box,” Fisker said.

Shares in Fisker rose 39% to a record $22.58 at the close in New York. Hon Hai Precision Industry Co. advanced as much as 5% in Taipei.

In October, Foxconn introduced its first-ever EV chassis and a software platform aimed at helping automakers bring models to the market faster. This month, Hon Hai Chairman Young Liu said two light vehicles based on the Foxconn platform will be unveiled in the fourth quarter. Foxconn is also planning to help launch an electric bus around the same time.

The Taiwanese company is expected to build more than 250,000 vehicles annually for the Fisker partnership, according to the statement. Foxconn may choose to make some of those cars in the U.S., a person familiar with the matter said. Following Wednesday’s memorandum of understanding, the two sides said they will enter a formal agreement in the second quarter of 2021.

Fisker is the second battery-powered car venture to be founded by its namesake founder, a longtime auto designer. Its debut model, the Ocean electric SUV, is scheduled to start production in late 2022. Henrik Fisker’s first venture, Fisker Automotive, filed for bankruptcy in 2013.

The model built by Foxconn will be an all-new type of vehicle, Fisker said. Its design will defy segmentation the way the Volkswagen AG did with the Beetle and BMW AG did with the all-new Mini that came out in 2001, he added.

Fisker got the idea of the planned vehicle when he was reading about Apple’s plans for a car. He said he began sketching what he thought a tech company would build if one went into the car business.

"It will be like nothing you’ve seen before,” Fisker said.

Foxconn is the second major manufacturer Fisker has announced partnerships with since reaching a deal to go public last year. In October, the EV startup said Magna International Inc. would help it build the Ocean SUV.

In January, Foxconn signed a manufacturing deal with embattled Chinese electric-vehicle startup Byton Ltd. with the aim to start mass production of the Byton M-Byte by the first quarter of 2022. A week later, Foxconn and Zhejiang Geely Holding Group Co. announced they were joining forces to provide production and consulting services to global automotive enterprises.

Amid reports of Apple’s car project gaining momentum, Foxconn has bulked up its automotive capabilities. That could make it a major contender to make cars for its largest customer.

But with development work still at an early stage, Apple will take at least half a decade to launch an autonomous electric vehicle, people with knowledge of the efforts have said. That suggests the company is in no hurry to decide on potential partners in the auto industry.

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