Recently, the world's OEM giant Foxconn announced its entry into the electric vehicle industry, and plans to take a 10% share of the global electric vehicle market in 2025-2027.
After this news was announced, it aroused discussion in all walks of life, and perhaps many people are wondering, isn't Foxconn an OEM electronics company, and how come it suddenly wants to build its own electric cars?
Don't get me wrong, Foxconn is not trying to build its own cars, but in its own best OEM field, to start cooperation with traditional car companies, to help them OEM electric cars. Even if it is OEM, where does Foxconn's bottom line come from?
Foxconn's parent company, Hon Hai Group, was founded in 1974 on the Chinese island of Taiwan. Hon Hai was established in the early days, mainly to household appliances mold processing. In the 1980s, with the advent of the Internet era, founder Kuo Tai-ming saw the potential of the PC market, Hon Hai transitioned to the production of computer parts. But soon, the factory's production capacity could not keep up with market expansion, and local expansion was costly. But at this time, across the strait, Shenzhen as a special economic zone with a variety of investment incentives, double factors, in 1988, Guo decided to invest in Shenzhen to build factories, and set up Longhua Foxconn in Shenzhen.
Thirty years of time, relying on the motherland's demographic dividend, seizing the opportunity of the times, Foxconn has developed rapidly, becoming the world's most well-known OEM factory. Thanks to Foxconn's development, its parent company, Hon Hai Group, ranked 23rd among the world's top 500 companies in 2019, with products in the fields of communications industry, optoelectronics industry, automation equipment industry, precision machinery industry and so on.
Foxconn has already held a solid position in its long-developed fields, and why is it turning the tables and entering the electric vehicle industry at this time?
Necessary layout for industrial upgrading
According to the data in Foxconn's prospectus, from 2015 to 2017, Foxconn's net attributable profit amounted to 14.350? billion yuan, 14.366? billion yuan and 15.868? billion yuan, with an average annual compound growth rate of 5.16%, and the net interest rate stagnated and has been hovering at 5%.
In fact, Foxconn's direct labor costs reached 16.5?62?billion yuan in 2017, which has exceeded the 15.868?billion yuan of the year's net attributable profit. Rising labor costs and the reduction of traditional electronic OEM profits, Foxconn needs to make changes as soon as possible.
In addition to increasing investment in research and development, to automation, intelligent direction of the industrial Internet, Foxconn is also in multiple areas of investment layout, Foxconn's investment covers 3C intelligent hardware, artificial intelligence, industrial Internet, technology travel, medical technology and other hardware enterprises.
In the field of science and technology travel, Foxconn **** has 11 investments, of which the representative of the two car-related enterprises, Xiaopeng Automobile and Ningde Times.
It can be said that Foxconn has long set its sights on the field of new energy vehicles while struggling to transform itself.
Seize the wind mouth of new energy vehicles
New energy automobile industry belongs to the sunrise industry, the development prospect is infinitely optimistic. Although the line is like a mountain, but there are still countless companies want to join.
Domestic former Gree Dong Mingzhu, followed by Hengda Xu Jiayin.
In the wind mouth of new energy vehicles, Foxconn also want to get a share of the pie. But Foxconn is different from the previous several companies that build their own cars, it is to participate in the field of new energy vehicles in the form of OEM processing.
Accumulation of automobile manufacturing technology
Some people may wonder what Foxconn, which has only invested in the new energy field, is capable of undertaking the work of OEM.
In fact, as early as 2005, Foxconn acquired Antai Electric, a Taiwan-based company specializing in the production of automotive wiring harnesses, and through this merger and acquisition, Foxconn is considered to have entered the field of automotive parts production.
By 2010, Foxconn had become a supplier of parts such as center touch-screen panels to Tesla, the world's best-selling new-energy carmaker.
In 2013, Foxconn added multinational carmakers such as Mercedes-Benz and BMW to its supply list of parts for the automotive sector, supplying them with high-tech systems such as in-car entertainment devices, automotive electro-mechanics, and automotive electronics.
If before that, Foxconn had only touched the traditional automobile manufacturing sector. Then in 2014, Foxconn and Beijing Benz started cooperation*** with the development of new-generation batteries and systems, announcing Foxconn's formal entry into the field of new energy vehicles.
In 2016, Foxconn, which has accumulated rich experience in auto parts manufacturing, joined forces with Tencent and Harmony Motors, China's second-largest luxury car dealer, to cooperate, and the three parties will try to make an attempt in the field of "Internet + intelligent electric vehicles".
In 2017, Foxconn divested from a three-way partnership with Tencent and Harmony in its first failed attempt at electric car production.
Three years of silence in the field of new energy vehicles, Foxconn, in January this year, there is a new action, Foxconn announced cooperation with Fiat Chrysler, respectively, 50% shareholding in the way of the establishment of a joint venture company, the development and production of electric vehicles and the operation of car networking business in China.
October 16, 2020, Foxconn officially released the electric vehicle chassis and software platform "MIH?EV open platform", and revealed that it is negotiating with a number of car companies for OEM services.
Written in the end
To this point, perhaps many people will be as surprised as I am, the original so many years, Foxconn has gradually penetrated the field of new energy vehicles.
So Foxconn's formal entry into the new energy automobile field is not a pie in the sky, but a prepared one.
It will use its most familiar OEM method to provide services to car companies and participate in new energy vehicle manufacturing. As Foxconn Chairman Liu Yang said at the launch of the new platform, "It may seem strange to jump into the EV game, but Tesla is the iPhone of EVs, and we want to be the Android of EVs."
This article comes from the author of Automotive Home Car, and does not represent Automotive Home's opinion position.