Taiwan-based Foxconn, known officially as Hon Hai Technology Group, reached a deal last week with Lordstown Motors to acquire the EV startup’s sprawling plant in northeast Ohio. This new deal will have Foxconn produce Lordstown’s Endurance pickup. Foxconn will also co-develop EVs with Lordstown, however, this will be dependent on if the startup can survive its current cash crisis which led to the deal with Foxconn in the first place.
Foxconn’s entry into the American electric vehicle space opens the door for one of the world’s biggest contract manufacturers to grab a foothold in a growing global business. Many automakers, including traditional companies and startups, have viewed dominating the EV space as an important part of their company’s future.
However, Foxconn’s experience in Apple iPhone production lends the tech giant a degree of manufacturing sophistication that could make it a serious player in the EV industry. “It’s a logical step,” said S&P Global Mobility analyst Stephanie Brinley. “What they are skilled at and what they’ve done with Apple is to be able to take their specs and build it. So they do understand manufacturing.”
Of course, there’s also the matter of complexity. Cars have thousands of more parts than phones, so there’s no guarantee Foxconn can make a smooth transition. “Obviously the iPhone is complex. I’d say an electric vehicle is maybe a little more complex,” said LMC Automotive analyst Jeff Schuster. “It’s a leap, but there are certainly some synergies there — and their expertise in the development of components in that space should (help) as the EV moves into more of a high-tech vehicle space.”
Foxconn’s close partner Apple has long been rumored to be considering entering the EV race, prompting analysts to posit that the Lordstown deal could provide Foxconn a way to prove its automotive credentials to Apple.