builds cars for "OEM", what is Terry Gou going to do this time?
Some time ago, Foxconn , the world's largest foundry, announced its newly developed two electric vehicles . At the same time, it was revealed to the public that in addition to OEM for mobile phones, Foxconn will also be able to OEM automobiles in the future. Foxconn executives stated that they will capture 5% of the world's electric vehicle manufacturing share by 2025, and hope that one day Tesla will become Foxconn's customer.
As soon as the news was released, many people questioned it: The technical threshold of the automobile industry is high, and Foxconn, which has no industrial accumulation, rashly "crosses over", is it possible? What kind of drama is Terry Gou doing this time?
1. Foxconn’s transformation into the automotive field
As we all know, as the largest OEM manufacturer of Apple, Foxconn has relied on the take-off of Apple mobile phones to get to where it is today. However, pure electric vehicles are not "iPhone with four wheels." BYD, which rashly transformed into the automotive industry in 2003, was also collectively shorted by fund managers in the Hong Kong stock market.
However, no matter how loud the outside world's doubts are, Foxconn founder Terry Gou is full of confidence in this "cross-border" and declared that Foxconn will complete Foxconn's transformation from "manufacturing" to "technology" through the deployment of electric vehicles.
So, why does Foxconn, which has been committed to the field of ICT manufacturing, insist on crossing over into the field of electric vehicles? In fact, one or two things can be seen from the terminal electronic product industry data.
According to data, the total global mobile phone sales in the first half of this year was 134 million units, a year-on-year decrease of 16.9%. Regarding PC tablets, shipments also dropped 11% year-on-year. It can be seen that as the downward pressure on the global economy increases, the market growth of terminal products such as mobile phones and computers has also reached the industry ceiling.
As the "iPhone OEM", Foxconn's days of relying on Apple to "make money" from a single major customer are over. With business declining and Foxconn being controlled by Apple, transformation is imperative. As one of the biggest trends in the artificial intelligence era, electric vehicles are stirring up Foxconn's nerves just as smartphones stirred up the ICT industry ten years ago.
Of course, Terry Gou’s desire to enter the electric vehicle industry is not just a whim, but has been planned for a long time.
2. Foxconn, which has been engaged in automobile OEM for 18 years
As early as 18 years ago in 2005, Foxconn announced its entry into the automobile industry by acquiring Antai Electric, a Taiwanese wire harness manufacturing company.
Since 2010, it has become a parts supplier for Tesla, Mercedes-Benz , BMW and other automobile brands, and then has invested in companies in automobile-related fields, such as Didi Chuxing. , Xpeng Motors , CATL , etc., at the end of September last year, spent a huge amount of 280 million US dollars to acquire the Lostown Automobile Factory in , Ohio. It can be said that in the past 10 years, Foxconn has never interrupted its layout in the automotive OEM field.
In 2020, Terry Gou made a high-profile announcement that Foxconn would enter the field of electric vehicles and open up the chassis platform, lowering the threshold for companies to enter the automotive field, thereby broadening the business development path of Foxconn's OEM automobiles. According to Terry Gou's expectations, in the automotive OEM field, he hopes that Foxconn can achieve the same market share of about 45% as in the ICT industry.
had high expectations and was fully prepared, but the reality is cruel. Terry Gou can learn from his "old rival" Wang Chuanfu .
As early as 2018, Wang Chuanfu also advocated the launch of the "D++ platform" as an open platform for use by companies in the automotive field. At the 2021 Chongqing Automobile Forum, Wang Chuanfu shouted to Lei Jun, founder of Xiaomi, to promote his platform. Objectively speaking, BYD's "D++ Platform" platform is among the best in the industry in terms of independent capabilities and market popularity. With various advantages, BYD should win more OEM orders. However, this is not the case.
3. Will Foxconn retake BYD’s “D++ platform”?
Five years have passed since the first launch of the D++ platform. Now have you heard BYD promote D++ again?
In this regard, some industry insiders analyzed that being "kidnapped" by BYD is the main reason why companies are unwilling to cooperate. The modular OEM of this platform means that BYD has packaged almost 80% of the parts of a car. When car companies seek out OEM, they not only use the platform, but also deeply tied to BYD's supply chain. In this way, the price will definitely not be cheap. This kind of in-depth cooperation requires high trust among enterprises.
It can be seen that Wang Chuanfu at that time and Terry Gou are going to do the same thing today. Then, Terry Gou can't escape the problems encountered by BYD.
Although Foxconn has the industrial chain foundation in 24 countries and regions around the world, unlike mobile phone OEM, the automobile industry has high requirements for scale and integration. As of now, Foxconn does not have the ability to install the entire vehicle. Looking at the entire automobile industry, more and more vehicle companies are accelerating their entry, squeezing the living space of "OEM" like Foxconn.
At present, although Foxconn has signed an order with the US Fisk, which produces 150,000 vehicles per year, Foxconn is still looking for opportunities for orders from mainstream car companies in the market.
4. Conclusion
In today's automotive industry, which is so "involved", it emphasizes core technology and brand influence.
Obviously, BYD, which already has these two advantages, has not improved much even if the automobile OEM track, but its new energy vehicle has repeatedly dominated the domestic new energy sales list, which is enough to live a very comfortable life.
But for Foxconn, whose entire main business of mobile phone OEM is in poor condition, OEM is a single-plank bridge that has many difficulties but has to go. As for whether Terry Gou can successfully step out of the "Foxconn model" of automobile OEM in the future, let us wait and see.
