Source of this article: Times Weekly Author: Wang He
In the context of a sluggish mobile phone business, Foxconn has turned its OEM to the more developed new energy vehicle .
Recently, Foxconn's parent company Hon Hai Group announced the latest two electric vehicles - crossover SUV Model B and pickup electric vehicle Model V at the third technology day held by it. The model name continues to be "Model". In addition to the three electric cars, Model C prototype, Model E sedan and Model T electric bus launched last year's second technology day, Hon Hai Group has released five models to the public in just one year, spared no effort to prove its "muscle" in making cars.
In order to prevent the outside world from feeling that it is "striking" or "clamoring" Tesla again, Liu Yangwei, chairman of Hon Hai Group, changed the direction of the wind at the meeting. He said, "I hope one day, I can help Tesla build cars." Liu Yangwei also emphasized that the original intention of Hon Hai Group's CDMS will not change, that is, it is a commissioned design and manufacturing service company (CDMS) in the automotive industry. In other words, Foxconn expressed its decision to build cars but not sell cars, and did not want to get rid of the title of "professional OEM".
In fact, Hon Hai Group's entry into the automotive field can be traced back to 2005. As the "pioneer" of Hon Hai Group's car manufacturing, Foxconn has made preparations for "car manufacturing". This call for Musk may be an unmissable charge on his car manufacturing journey.
"Foxconn seems to be aiming at Tesla, but in fact it is proving to the outside world that it has the ability to produce Tesla cars, including large-scale and high-quality production capabilities." TMT industry analyst Fu Liang told the Times Weekly reporter.
Why did you call Tesla
In Fu Liang's view, Foxconn's "sword dance" is intended to " Peigong ".
"At present, Tesla is more of a self-built production base, with a relatively stable model. Moreover, it has advantages in assisted driving systems and some parts supply channels." Fu Liang told the Times Weekly reporter, "But Tesla will not choose to let Foxconn produce."
At present, Tesla has established three major factories around the world. One is the super factory in Nevada, the United States, which was put into production in June 2014; the second is the factory obtained by acquiring solarcity in New York, USA; the third is the Shanghai factory, which was officially put into production in 2019.
Tesla is supplied by third-party suppliers in terms of core components such as power batteries and chips. For example, CATL and LG Chem mainly supply batteries to domestic Tesla Model 3 and Model Y, Nvidia mainly provides AMD Ryzen processor chips for Tesla, Junsheng Electronics provides Tesla with original sensors, original human-vehicle interactions, autonomous driving system electronic control unit, etc.
"Foxconn proves that it can build cars for Tesla this time is to give the outside world a confidence. The real targeting of the OEM business of most small and medium-sized electric vehicle manufacturers may be more interested in attracting emerging car manufacturers." In Fu Liang's view, Foxconn's call for Tesla may be more interested in attracting emerging car manufacturers.
In fact, many emerging car manufacturers have a low starting point, including cross-border car manufacturers such as Xiaomi , Baidu , etc. If the production and design are handled by themselves, the cycle will be very long. Therefore, it will be difficult for cross-border car manufacturers to build cars in person within a few years.
Fu Liang pointed out that with Foxconn's support, Xiaomi and Baidu may shorten the car manufacturing cycle, so that they can build new cars earlier, and better ensure that vehicles enter the market at low cost. "If cross-border car manufacturers build their own factories, they need to build a factory building with a piece of land and also need to build an automated production line, and the investment amount will be very high."
In addition, Fu Liang also believes that Foxconn may also enter the first-tier suppliers and make some parts for them to obtain more profits.
Foxconn's business philosophy has always been revolving around the consumer electronics leader. For a long time, it first became the foundry of HP and Dell .Afterwards, it successively won the OEM orders of the three major mobile phone manufacturers, Nokia , Motorola and Apple . When Huawei rose, it quickly became Huawei's OEM factory.
, Chairman of Chaodian Think Tank, Sun Yanbiao, told the Times Weekly reporter that Foxconn's olive branch was also because it was the leader in the field of new energy vehicles . "But at present, the so-called obstacles in front of Foxconn's car manufacturing no longer exist. Unlike the traditional automobile era, there is a high technical threshold for building engines." In Sun Yanbiao's view, the most powerful thing about Foxconn's factory is standardized production, so as to obtain a 5% OEM profit margin. Only by the service leader can Foxconn's scale effect be generated, which is the foundation of its survival.
"The entire consumer electronics market is declining. Whether it is Dell or Apple, including , Samsung, , they are destocking in . If Foxconn wants to find a new company with high relevance to do OEM, it is Tesla." Sun Yanbiao emphasized.
The dream of "King of OEM" in car manufacturing
Foxconn has been known as the "King of OEM", but in fact, it still has a heart for car manufacturing.
Sun Yanbiao revealed to the Times Weekly reporter, "Foxconn has made aluminum-magnesium alloys in Shanxi Industrial Park very early to enter the automotive parts industry."
According to the Foreign Trade Department of the Ministry of Commerce, the aluminum-magnesium alloy base in Taiyuan Economic and Technological Development Zone is the world's largest aluminum-magnesium alloy deep processing base. With Foxconn as the leader, Yiwei Magnesium Industry, Dongrui Magnesium Industry and other enterprises as the backbone, and more than 200 supporting enterprises have been established in the region and surrounding areas as support. The main export products include high-end parts such as electronic products and automotive components.
In 2005, after Hon Hai Group acquired 100% equity of Antai Electric, Foxconn relied on the production of automotive electronic products such as reverse radar and other automotive companies, successfully obtained orders from Volkswagen, Nissan , and began to lay out the car track. Since 2013, Foxconn has successively provided electronic products to automakers such as Tesla, Mercedes-Benz , BMW , etc. Since then, Foxconn has also jointly invested with BAIC New Energy to develop and produce a new generation of power batteries.
By 2020, Foxconn established joint ventures with Fiat Chrysler (FCA) and Yulon respectively to design and manufacture new energy vehicles. FCA's technology and Yulon's car manufacturing qualifications give Foxconn the confidence to build cars.
In 2021, Foxconn and Li Shufu's Geely Holdings signed the strategic cooperation agreement . The two parties established a joint venture to provide OEM production and customized consulting services for global automobile and travel companies, including but not limited to automobile complete vehicles, parts, intelligent control, etc., as well as the entire electric vehicle industry chain and the entire process. Both parties hold 350% of the shares of . The board of directors is composed of five directors, including two , Geely, and three Foxconn. The chairman is appointed by Foxconn.
However, the joint venture has disappeared since then, and there has not been much progress in the cooperation between the two parties.
In this regard, Fu Liang speculated that the two companies may be consistent in the direction they aim for in car manufacturing, but the genes, capabilities and scale of the two companies do not match very well, so it is difficult to reach a stable cooperative relationship under such circumstances. "And in recent years, the domestic automobile market has changed a lot, and emerging automobile manufacturers have risen rapidly. Geely might have thought that Foxconn would help it solve some problems, but after cooperation, it was found that it was not very helpful to it."
Although there has been no progress in cooperation with traditional domestic auto companies, this cannot stop Foxconn from continuing to deploy the upstream and downstream automotive industry chains. In February 2022, Foxconn successively built a chip factory with Indian natural resources group Vedanta and Malaysian technology company DagangNeXchange, basically completing the layout of the upstream and downstream supply chain of automobiles.
can make a car.
. Whether Foxconn can produce cars for Tesla is still unclear, but its production capacity can indeed support the idea of wanting to build a car.
"Foxconn does not need to have the ability to produce 500,000 vehicles, 1 million or even 5 million vehicles at one time. As long as you master this set of technology and quickly increase production capacity in a short period of time, it is one of Foxconn's biggest advantages." Fu Liang pointed out.Foxconn's production capacity is dynamic. For example, when Apple orders arrive from September to October every year, it can quickly pull up the production line and increase the production capacity to a very high state. Although the car is much more difficult, Foxconn has rich experience and the production cycle of is shorter than that of other OEM factories.
However, Fu Liang still believes that there is basically no possibility of Tesla and Foxconn cooperation because the two companies have no room for cooperation. Tesla has its own factories in its main target markets and has corresponding control over the automotive and computer software.
, and Foxconn's focus is on OEM and selling its software systems. "In the process of replacing oil with electricity and intelligence in the automobile power supply, there will be many new products. If the host manufacturer does not have the ability to develop or thinks it does not need to develop it themselves, Foxconn can cut a piece of cake from it," said Fu Liang.
In terms of automotive software, Foxconn's ace is its own developed HHEV.OS. As the automotive industry enters the era of "software-defined cars", HHEV.OS can simplify the complexity of software development and significantly shorten the development time, which is conducive to manufacturers jointly building an electric vehicle software ecosystem.
"And these aspects are Tesla's core competitiveness, especially the software-oriented part, so Tesla will not easily use third-party systems." Fu Liang said.
In fact, as one of Apple's largest suppliers, Foxconn has long been labeled as an "Apple OEM factory". In the future, when the electric vehicle business becomes a new growth point in performance, can Foxconn take off this hat?
In Sun Yanbiao's view, the label of "Apple OEM" actually means that Foxconn is an OEM giant. For Foxconn itself, its positioning should be an OEM factory of the world's leading technology brand.
Fu Liang pointed out that Foxconn also manufactures OEM for other manufacturers, including Huawei, Xiaomi, Luo Yonghao 's Hammer mobile phone brand. But relatively speaking, Foxconn is still very stable in OEM for Apple, and its overall revenue and profits are not low.
However, in Fu Liang's opinion, although Apple's shipment volume is large, if it is batched to other manufacturers, the volume may not be large, but there are many troubles, and uncertain factors will increase costs. Then, adjusting the production line back and forth for uncertain orders is a very high invalid investment. Therefore, if Foxconn produces OEM for other auto manufacturers, it may also face similar problems.
From the current point of view, Apple believes that the cost of production is too low, so it gives the "manufacturing" link that does not make money to the OEM factory and will never pick it up again. However, domestic electric vehicle manufacturers, including mobile phone manufacturers, are all looking for OEMs, and they also want to build their own production lines.
"It is difficult for Foxconn to gain favor from mainstream customers in the automotive field. The key is to find some manufacturers to mass-produce them first, and then form their own reputation." Fu Liang said. It needs to maintain stable quality and low cost, so as to reduce the worries of manufacturing links for manufacturers.
But Fu Liang's opinion, after the reputation is established, although some orders can be successfully obtained, the uncertainties in the future automobile market will also bring hidden dangers to its development. "After all, there are dozens of small and medium-sized electric vehicle manufacturers in the market now competing, but many manufacturers may completely withdraw from the market within three years."
