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Apple supplier Foxconn starts building an electric vehicle plant in Zhengzhou

Foxconn breaks ground on a new electric vehicle plant in Zhengzhou, China, aiming to expand its success in the automotive industry.

You might be familiar with Foxconn Technology Group, the world’s largest iPhone factory operator. The company is making headlines again by breaking ground on a new electric vehicle (EV) plant in Zhengzhou, the capital of Henan province in China. This move marks Foxconn’s ambition to replicate its iPhone success in the automotive industry.

New beginnings in electric vehicles

On Tuesday, Foxconn, also known as Hon Hai Precision Industry, held a groundbreaking ceremony for its “trial manufacturing centre” for electric vehicles in Zhengzhou. This event signifies the start of a new chapter for Foxconn, expanding its production capabilities beyond smartphones. The provincial government made the announcement, highlighting the importance of this new venture.

The new EV production centre aims to cater to domestic and international automobile brands. Foxconn aims to transform the Zhengzhou Airport Economy Zone, home to its largest iPhone factory, into a key production base for its new energy vehicle segment. This strategic location will boost the company’s footprint in the automotive sector.

Commitment to Henan Province

A day before the groundbreaking ceremony, Foxconn reaffirmed its dedication to the Henan region by signing a strategic partnership with the provincial government. During the ceremony, Liu Young-way, Foxconn’s chairman and chief executive, emphasised the company’s strong commitment to Henan. He stated that Foxconn will “continuously be rooted and ploughing deeply in Henan,” underscoring the importance of this cooperation.

Apple supplier Foxconn starts building an electric vehicle plant in Zhengzhou
Image credit: Global SMT

Henan’s provincial governor, Wang Kai, expressed the government’s support for Foxconn’s development in the area. He highlighted the significance of the company’s expansion and its efforts to explore new regional sectors. The partnership between Foxconn and Henan Province is set to drive economic growth and innovation.

While the relationship between Foxconn and Henan Province is strong, it has only sometimes been smooth sailing. In 2022, Foxconn’s production in Zhengzhou faced significant disruptions due to a COVID-19 outbreak. This led to mass walkouts and worker protests over stringent pandemic controls and wages. The resulting chaos caused shipment delays for iPhones during the holiday season, affecting Apple’s supply chain in its home market and Europe. As a result, Apple accelerated its plans to diversify production outside of China, shifting some operations to India and Vietnam.

Diversifying business operations

Foxconn’s venture into electric vehicles is part of its broader strategy to diversify its revenue streams. In addition to EVs, the company is exploring other new business areas, including semiconductors and robotics. Last April, Foxconn chose Zhengzhou as the headquarters for its new business initiatives. The company plans to invest 1 billion yuan (US$137 million) in a 70,000-square-metre complex dedicated to these new ventures.

In June 2023, Foxconn established the Foxconn New Business Development Group in Zhengzhou, with a registered capital of 1 billion yuan. This group focuses on EV sales and battery production. Additionally, in January, Foxconn set up the Foxconn New Energy Vehicle Industry Development (Henan) Co. with a registered capital of 500 million yuan. These developments highlight Foxconn’s commitment to becoming a significant player in the EV industry.

By expanding its operations in Zhengzhou and venturing into new industries, Foxconn aims to continue its legacy of innovation and success. The company’s latest EV plant in Henan province represents a significant step towards achieving this goal.

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