Hon Hai Technology Group's Foxconn unit has inked memorandum of understanding with electric vehicle maker Fisker to manufacture more than 250,000 vehicles starting in the fourth quarter of 2023.
The deal highlight's what's becoming obvious. Electric vehicles are basically big batteries on wheels. And given Foxconn does electronics of all types--smartphones, servers, networking gear etc.--branching out to electric vehicles seems like a natural extension.
According to Fisker and Foxconn, a formal deal will be concluded in the second quarter.
What's unclear is whether auto manufacturers such as GM, Ford and Jaguar Land Rover that are gunning for Tesla follow suit with expanding contract manufacturing. Magna is already a key third party manufacturer for the auto industry. Jaguar Land Rover is hoping to leverage parent Tata and its IT units to innovate on electric vehicles.
Under the deal with Fisker, Foxconn will co-develop "a breakthrough new segment vehicle" that will be aimed at the global market. Fisker is launching its first vehicle called the Ocean SUV in the fourth quarter of 2022.
The new vehicle, called Project PEAR (Personal Electric Automotive Revolution), will aim to offer innovation, value for the money and advanced technology and design.
In a statement, Foxconn Chairman Young-way Liu said the deal with Fisker combines information and communications technology with the auto industry and can create new breakthroughs. Time to product will also increase with the Fisker and Foxconn collaboration going from whiteboard to production in 24 months.