iPhone maker Foxconn wants to build EVs, agrees to buy an Ohio car factory
Tesla’s China operation skids on souring public sentiment
—Jeremy Goldkorn, Matthew Silberman, and Chang Che
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Foxconn goes to Ohio to make cars
Apple’s favored manufacturer is buying an Ohio car factory once owned by GM in a $230 million deal. For Foxconn and the seller, American EV maker Lordstown Motors, it’s a win-win:
Lordstown, which has overpromised and underdelivered on its Endurance electric pickup truck, will get help scaling production with Foxconn as a new partner.
Foxconn, which has never built cars, gets free reign to build expertise and work with additional partners in the huge factory.
The context: With smartphone innovation slowing, Foxconn is pivoting. Its chairman wants the company’s designs, components, and software in 5% of all electric vehicles by 2025, and to make that happen, it’s acquiring or developing semiconductors, self-driving software, motors, and better batteries.
Its centerpiece is an open-source platform to standardize EV hardware and software, making it faster and easier for other brands to develop new cars, à la Google’s Android software.
Foxconn is planning factories in Thailand by 2022, in addition to the U.S., with production to begin the following year. Europe is another potential location.
The kicker: What it really wants is the iCar. Many observers believe Foxconn is readying itself to build what founder Terry Gou has called an “iPhone with four wheels."
Tesla loses court case in China, and possibly its reputation
Elon Musk was singing China’s praises as recently as last week — and he might want to keep belting it out. A Beijing court found Tesla guilty of fraud for claiming a used car was in better condition than it was.
The $58,700 Model S still had structural damage after an accident, but buyer Hán Cháo 韩潮 apparently wasn’t told. He sued the carmaker and won over $232,000.
It’s unclear if Han or Tesla is unluckier that he bought the car; Tesla has been criticized relentlessly by Han, who has over 120,000 followers on Weibo, ever since.
Why it matters: Tesla, the first foreign car company to be allowed a wholly-owned factory in China, is keen to steer clear of negative press in a country where boycotts have targetedcountlessforeignbrands.
But the carmaker can’t seem to avoid controversy; it has endured a massive recall due to software issues, rumored brake failures, and a woman’s viral protest atop a car.
And the current saga is far from over. Tesla is countersuing Han for slander after he called it a “hooligan company.”
Meanwhile: Musk’s Chinese rivals are speeding ahead. Over the summer its sales in China dropped 29% year-on-year while XPeng and Li Auto reported new records. Next, XPeng and NIO are expanding to Europe.