The electric, autonomous vehicles of the future might be manufactured by Apple’s main supplier Foxconn and Chinese automaker Zhejiang Geely Holding Group.
The two companies have agreed to form a joint venture focused on contract manufacturing for automakers, with a specific focus on electrification, connectivity and autonomous driving technology as well as vehicles designed for sharing. Each party will hold an equal 50% stake in the new joint venture. The board of directors will consist of five members, with Foxconn appointing three, including the chairman, and Geely Holding appointing two, according to a statement issued by the two companies.
The agreement follows moves by both companies to take larger roles in contract manufacturing for automakers. Earlier this week, Geely said it would help China’s search giant Baidu set up a company to produce electric vehicles. Baidu will provide smart driving technologies while Geely will be in charge of car design and manufacturing. Meanwhile, Foxconn has announced plans to help troubled Chinese electric car startup Byton build its M-Byte SUV.
Geely Holding Group CEO Daniel Donghui Li said that the global automotive industry is undergoing profound changes. Geely must “actively embrace change, build alliances and synergize resources to create greater value for our users,” he said, adding that Foxconn’s expertise will offer important insight for the transformation and evolution of the automotive industry.
The joint venture will provide consulting services on whole vehicles, parts, intelligent drive systems and other automotive ecosystem platforms to automakers as well as ridesharing companies. Geely will bring its experience in the automotive fields of design, engineering, R&D, intelligent manufacturing, supply chain management and quality control while Foxconn will bring its manufacturing and Information and Communication Technology (ICT) know-how.
The aim, the companies said, is to help automakers accelerate their transition to new innovative and efficient manufacturing processes and business models based on connected, autonomous, shared and electrified technologies (referred to in the industry as CASE).
Dozens of new companies aiming to become the next Tesla or trying to commercialize autonomous vehicles have popped up in recent years, giving this Foxconn-Geely enterprise a long list of potential customers. One of the primary roadblocks to making vehicles at volume is the billions of dollars required to build and tool a factory. That need for capital has prompted a number of EV startups to become publicly traded companies by merging with a special purpose acquisition company. Canoo, Fisker, Lordstown Motors and Nikola Corp. are a few that have merged with a SPAC, otherwise known as a blank-check company.
Foxconn Technology Group chairman Young-way Liu called the alliance a milestone in cooperation between the automotive and information and communication technology (ICT) industries.
“With Foxconn’s globally leading R&D technologies, intelligent manufacturing, and hardware-software integration capabilities, the two parties form a highly complementary partnership which allows us to better serve and meet the diverse needs of different customers, and offer the most advanced, fastest, cost-effective full value-chain vehicle production service platform,” Young-way Liu said, adding that the partnership will result in tremendous change in the development of the automotive industry.