"Cars are very complex compared to mobile phones. You can't go to a supplier like Foxconn and say, build me a car?" Musk said publicly a few years ago.
However, Foxconn has shown with practical actions that car building is already in progress.
A few days ago, Hon Hai Group (the parent company of Foxconn), which just released the Model series of new cars, reported that it is adjusting its supply chain strategy in order to increase its bargaining power for Tesla.
The former Hon Hai Group electric car shell supplier, Commodore Hong, will be replaced by Yisheng-KY, which has already cooperated with Tesla.
For this matter, the relevant supply chain manufacturers declined to comment.
On the 2022 Technology Day, Hon Hai Group released two of its newly developed electric vehicles, the pure electric SUV Model B and the electric pickup Model V.
Prior to the 2021 Science and Technology Day, Hon Hai Group launched three electric vehicles, the Model C prototype car, the Model E sedan and the Model T electric bus; in just one year, Foxconn has released five models.
Judging from the name of Foxconn's new model, it is similar to the name of Tesla's model, and some people call it "Bo concern".
Liu Yangwei, chairman of Hon Hai Group, said at the Technology Day event that he hopes to help Tesla build cars one day.
Not only that, he has repeatedly emphasized that Foxconn's original intention to enter the electric vehicle field is to serve as a commissioned design and manufacturing service company in the automotive industry, and will not sell its own brands.
Foxconn released five cars, is the car building qualified?
It is undeniable that Foxconn is doing its best to prove that it has the ability to build cars.
On the Hon Hai Group Technology Day last year, Foxconn officially released the pure electric vehicle brand Foxtron, and also released three new electric models; according to Foxconn's plan, these three models will be manufactured by Honghua Advanced, a joint venture between Foxconn and Yulon Motors.
On this year's Technology Day, Foxconn released two new models and a production version of the Model C.
According to the information disclosed by Foxconn, it has covered categories such as SUVs, sedans, buses and pickups, which are provided to brand customers as a reference to attract cooperation.
What is Foxconn's car-making strength?
Take the production version Model C that has already started pre-sale as an example. This model is the first model built by the MIH electric vehicle open platform. It is positioned as a compact pure electric SUV. The price is less than 230,000 yuan. The trim uses the instrument screen and the central control screen to replace most of the physical buttons, and there are not many bright spots.
The Model B, which is also based on the MIH electric vehicle open platform, has been questioned by the industry because its overall shape is similar to the Volkswagen ID.3; the latest model Model B has a cruising range of 450 kilometers.
Cui Dongshu, secretary general of the National Passenger Vehicle Market Information Association, said that the current cruising range of mainstream new energy vehicles has basically increased to more than 500 kilometers, and there are also car companies that are deploying long-range vehicles with a range of more than 1,000 kilometers.
According to Bai Yiyang, manager of the securities department of CMB International, Foxconn has not seen very detailed parameters for several cars of its own brand. It is expected to focus on sales in Taiwan, China, and the promotion in the Chinese mainland market will not be too fast.
Mei Songlin, a senior analyst in the auto industry, believes that although Foxconn is big, the local market for its headquarters is very small, and it is difficult to build a new car brand; he added that successful car brand building often starts from the local market.
Cao He, president of Quanlian Automobile Investment Management (Beijing) Co., Ltd., said frankly that Foxconn's car manufacturing strategy has not been clearly demonstrated in recent years, and the market has doubts about its future development prospects.
In addition, as the foundry of the iPhone, Foxconn has launched its own mobile phone brand InFocus, but its market share is not optimistic, and the sales volume is hard to say; therefore, there are also doubts in the industry whether it can build a good car.
17 years of layout of the automotive industry chain, cross-border or downturn due to mobile phone business
Foxconn's entry into the field of electric vehicle manufacturing is not a whim, dating back to 2005.
In 2005, Foxconn acquired 100% of the shares of Antai Electric, one of the four major automotive wiring harness factories in Taiwan, at a price of 370 million yuan. With the help of automotive electronics, it officially entered the automotive industry; Antai Electric also became the starting point for Foxconn's layout in the automotive field.
In 2013, Foxconn reached a deal with Tesla, won orders from Tesla's supply chain, and became the main supplier of touchscreens, connectors and lithium batteries for its central control; in the same year, Foxconn became a supplier of luxury brands such as Mercedes-Benz and BMW. .
2015 became a crucial year for Foxconn to officially step into car manufacturing.
Foxconn, Harmony Automobile and Tencent jointly established Harmony Forteng, and hatched the FMC project a year later, but in 2016, Foxconn gave up Harmony Forteng and officially withdrew.
Mei Songlin said that Foxconn worked together with Harmony Automobile and Tencent to build cars in 2015, and Foxconn has always planned to build cars not a "conspiracy" but a "conspiracy".
Regarding Foxconn's withdrawal from Harmony Forteng, Bai Yiyang believes that Foxconn's withdrawal from Harmony Fortum may fundamentally be due to the lack of synergy between the interests of all parties. Foxconn intends to OEM, but its partner intends to complete the vehicle.
But even with the withdrawal of Harmony Forteng, Foxconn has not left the automotive industry, focusing on fields such as intelligent networked electric vehicles.
Since 2017, Foxconn has successively invested in Didi Chuxing, Xiaopeng Motors, Ningde Times and AutoCore.ai, but Foxconn withdrew from Xiaopeng Motors in 2019; in early 2020, Hon Hai Group and Yulon Motors established a joint venture; May 2021 Hon Hai Group and Foxconn signed a non-binding memorandum of understanding with Stellaantis Group to reach cooperation; in September this year, a subsidiary of Hon Hai Group planned to spend US$75 million to establish a new joint venture with Stellantis.
In October, Hon Hai Group and INDIEV, a California electric vehicle start-up company, announced the signing of a memorandum of cooperation.
Bai Yiyang said that the growth rate of consumer electronics has slowed down on a global scale, and upstream industry chain companies such as Foxconn that make mobile phones need to expand the second growth curve.
In 2016, due to the decline in Apple's shipments, Hon Hai Group's revenue declined for the first time since its listing. In recent years, Foxconn's revenue growth has continued to slow down, and its gross profit margin will drop to 8.3% in 2021.
According to the latest semi-annual report of Foxconn's Hong Kong-listed Foxconn Group, the net profit attributable to the parent in the first half of this year was a loss of US$23.78 million.
Not only that, with the status of companies such as Pegatron and Luxshare, Foxconn's "cake" was divided.
Essence Securities analyzed that the automotive electronics industry will become another major development opportunity at the level of the entire industry chain after home appliances, PCs and mobile phones.
Mei Songlin said frankly that one of the purposes of Foxconn's car manufacturing is that smart new energy vehicles are the next big smart manufacturing industry. No matter whether it is in person or as an OEM, this historical opportunity cannot be missed.
Aiming at OEM business, own brand or to accumulate production experience
On the Technology Day, Hon Hai Group Chairman Liu Yangwei repeatedly emphasized that Foxconn would not sell its own brands; he even expressed his hope that one day he could produce electric cars for Tesla.
In Mei Songlin's view, the second purpose of Foxconn's car manufacturing is to actively accumulate experience in smart car manufacturing, prepare for Apple's car OEM, and work with Apple to harvest industry opportunities.
Bai Yiyang also has the same view. He believes that Foxconn's layout is mainly consistent with the development of the consumer electronics industry.
From the perspective of business layout, Foxconn's car manufacturing is to accumulate experience for Apple's car OEM.
"Accumulate the manufacturing experience of smart electric vehicles in an all-round way. Based on Tesla's product line, covering the complete product line, there may be an opportunity to cut into the smart electric vehicle industry from Tesla's foundry, and also serve Apple well in the future. Get ready for the car." Mei Songlin said, "Building Foxconn's own car brand should not be its focus. Once the trend of new energy vehicles replacing traditional cars on a large scale is formed, Foxconn will usher in huge OEM opportunities."
In Bai Yiyang's view, Foxconn may focus on some regional markets in the early stage and sell its own brands, but after the manufacturing and supply management matures, it turns to OEM for mainstream brands of cars and abandons its own brands; in other words, in the early stage, its own brands The brand is only to accumulate production experience.
In fact, last year Foxconn had already won its first car assembly order. In May last year, Foxconn and American electric car manufacturer Fisker formally reached a cooperation on car assembly, and will launch a new car in 2023.
With the development of intelligent electric vehicles, the industry generally believes that the OEM model may become a trend. Yingya Securities believes that the number of parts and components of intelligent electric vehicles is greatly reduced compared with traditional fuel vehicles, accounting for only 40% of the value of the vehicle, and it is also very difficult to manufacture. Reduced; under such a background and the support of national policies, the OEM model of smart electric vehicles may gradually become a trend.
But is the OEM business really easy to do?
Due to factors such as production qualification constraints and excessive investment in building factories, new car manufacturers will choose the OEM model in the initial stage, but as the scale grows, self-built factories have become the main choice due to the grasp of quality control and the long-term development of the brand. .
For example, Xiaopeng Motors once reached an OEM agreement with Haima Automobile, but at the end of last year, the OEM agreement between Xiaopeng Automobile and Haima Automobile will not be renewed, and it has built its own factory in Zhaoqing, Guangdong.
Cao He believes that self-built factories by car companies are more conducive to mastering the core production and manufacturing links, mastering quality control technology and quality, and mastering the core technology in their own hands.
It is generally believed in the industry that although Foxconn hopes to OEM Tesla, according to Tesla's development strategy, it is still mainly self-built.
It is doubtful whether Foxconn's foundry abacus can start.
In January last year, Foxconn and Geely Holding reached a joint venture to provide OEM and customized services, but the progress of the joint venture is unclear.
In fact, BYD Chairman Wang Chuanfu also publicly called Xiaomi founder Lei Jun last year to promote the BYD E3.0 platform, but Xiaomi did not choose OEM but built its own factory.
Bai Yiyang believes that there is still a difference between automobile manufacturing and mobile phone manufacturing. The automobile OEM model will still be in the trial and error stage in the next three years, and the short-term prospects are not very clear.
In Cao He's view, Foxconn's attempt to replicate the foundry model in the automotive market will not see results for at least five years.
The Beijing News Shell Finance reporter Wang Linlin edited by Xu Chao proofreaded Liu Baoqing