Foxconn Technology Group, Apple’s major supplier, is expanding its business with a significant investment in electric vehicle (EV) batteries. The company, officially known as Hon Hai Precision Industry, has announced a US$82 million (600 million yuan) investment in a new EV battery plant in Zhengzhou, Henan province, China. This city is already home to Foxconn’s largest iPhone factory, making it a critical base for the company’s operations.
The investment, detailed in a filing to the Taiwan Stock Exchange on Monday, marks a long-term commitment to Foxconn’s EV ambitions. Foxconn New Energy Battery (Zhengzhou), the division handling the project, was established in October last year. The first phase of the capital injection, which amounts to 350 million yuan, is managed through the Foxconn New Business Development Group, which fully owns the EV battery unit.
Diversifying with EVs and beyond
Foxconn’s new focus on EVs is part of its strategy to diversify revenue sources, branching out into emerging industries such as semiconductors, EVs, and robotics. The Foxconn New Business Development Group was set up in June last year with an initial capital of 1 billion yuan to handle EV battery production and sales.
Construction of the new division’s headquarters, covering 70,000 square metres, is already underway in Zhengzhou. The company has also introduced several EV models, including the Model C family SUV, Model D multipurpose vehicle, and Model U mid-sized electric bus. According to Jun Seki, head of the company’s EV business, Foxconn’s EV ambitions aim to secure 5 per cent of global EV manufacturing by next year.
Commitment to Zhengzhou despite challenges
This investment reaffirms Foxconn’s dedication to Zhengzhou, even after significant disruptions to its iPhone production in late 2022. A major COVID-19 outbreak at the factory caused worker shortages and delayed shipments for Apple during a critical sales period. The setback pushed Apple to shift some of its production from China, turning to India and Vietnam.
In July of this year, Foxconn chairman Liu Young-way visited Zhengzhou and highlighted the company’s strong commitment to the province of Henan. He reiterated that Foxconn remains deeply rooted in the region and announced the start of a trial manufacturing centre for EVs.
Although Foxconn is heavily investing in China, it is also expanding its global production footprint. In 2022, the company acquired an EV facility in Ohio from Lordstown Motors to strengthen its presence in the United States. This international strategy aligns with Foxconn’s aim to establish itself as a leading player in the EV sector while reducing reliance on its iPhone business.
With this latest move, Foxconn is determined to adapt to changing market demands and solidify its position in emerging industries.
