Apple Car is years away, but the Cupertino tech giant is busy finalizing its supply chain. Now, Apple’s long-term iPhone assembling partner Foxconn has closed a new deal to purchase Lordstown Motors Corp’s auto plant in Ohio which makes it a contender to assemble Apple Car as well.
Recently, it was reported that Apple will manufacture its electric vehicle (EV) independently after several unsuccessful negotiations with potential assemblers of Apple Car. It was said that automakers like Nissan were reluctant to become Apple’s suppliers over the fear of losing authority and being control by the tech giant.
Having said that, Foxconn already has years of experience with Apple which might play a factor in becoming an Apple EV manufacturer. Bloomberg reports that the manufacturer has “agreed to spend $280 million on the Lordstown deal, one of the top vehicle-related investments it has made over the past two years.”
Foxconn has a lot of more than purchasing an auto plant to become an Apple Car’s assembler
Unlike iPhone, Apple Car manufacturing is completely different dynamics. It not only requires a new facility but an entirely new supply chain of components, labor, developing team, and more. Therefore, the purchase of an assembly facility does not guarantee that Foxconn will be awarded the Apple Car manufacturing order.
Foxconn’s early moves into cars have yielded few tangible results, and Apple is set to require solid proof of vehicle-manufacturing expertise before it settles on a partner — if the iPhone maker decides to make the leap into autos at all.
Earlier this year, it was reported that in partnership with Zhejiang Geely Holding Group, Foxconn will provide production and consultation services to the automotive companies worldwide. In March, the company’s Chairman Young Liu confirmed that Foxconn plans to build electric vehicles in North America by 2023 and was evaluating multiple locations in the U.S. and Mexico as EVs assembling facilities. It was speculated that Liu was referring to Apple Car manufacturing.
As per the report industry analysts are skeptical of Foxconn’s future in the automobile industry.
Analysts at CL Securities Taiwan said in a note the plant purchase is cheaper and quicker than building capacity from scratch, which “should help alleviate some investors’ concerns on the visibility for EV earnings contribution.”
But, the company’s chairman is hopeful. Viewing the new deal as a positive step, Hon Hai Chairman Young Liu said:
The Lordstown deal “reflects Foxconn’s flexibility in providing design and production services for different EV customers.”