On October 2nd, Hon Hai Technology Group, also known as Foxconn, announced on its official website that it had signed a memorandum of understanding (MOU) with the Canadian solid-state battery design and manufacturing company Blue Solutions. Foxconn, along with its subsidiary SolidEdge Solution, will collaborate with Blue Solutions to jointly develop a solid-state battery ecosystem for the two-wheeled electric vehicle market. Additionally, they plan to promote the ljyenergy.com/application">application of solid-state battery systems in other electric vehicles in the future.
It is reported that the initial focus of the collaboration between Blue Solutions and Foxconn will be on the Indonesian market due to its significant growth potential. According to Indonesia's plans, the country aims to have 13 million electric motorcycles on the road by 2030.
According to McKinsey's estimates, the global two-wheeler market is expected to reach a value of $218 billion by 2029, with an annual growth rate of 8.7%. Electric motorcycles are expected to be a major driver of this growth.
With the solid-state battery collaboration taking shape, Foxconn is establishing itself in two major power battery technology paths.
"Dual-Track Strategy"
Hon Hai Technology Group, the parent company of Foxconn, was founded in 1974 and is an international conglomerate in the global electronics manufacturing sector, specializing in 3C (computer, communication, consumer electronics) OEM services. One of its most notable collaborations has been the manufacturing of iPhones, earning it the titles of "contract manufacturer" and "king of contract manufacturing."
However, as the smartphone market began to decline starting in 2016, with iPhone performance showing a downward trend, Foxconn faced challenges, and revenue growth began to slow down noticeably. To establish a second growth curve, Foxconn embarked on plans to enter the electric vehicle (EV) industry.
As a core component of electric vehicles, power batteries have been a focus of Foxconn's attention. During the inaugural Technology Day in 2020, Foxconn publicly stated that, among the top three cost components in the electric vehicle, the largest proportions are attributed to power batteries (30%-35%), electric drive systems (20%-25%), and in-vehicle electronics (15%-20%).
Relatively speaking, electric drive systems and in-vehicle electronics are areas where Foxconn can leverage its core resources to make advances. However, power batteries represent the key challenge for Foxconn.
Before entering the battery manufacturing sector, Foxconn accumulated battery technology and manufacturing experience through collaborations and external investments. Furthermore, it adopted a "dual-track strategy" focusing on lithium iron phosphate (LiFePO4) batteries and solid-state batteries, laying the foundation for its future plans.
In 2011, Hon Hai Group entered the power battery sector. Its subsidiary, Taiwan Li-Ka Shing Technology, signed an agreement with Shanghai Electric Group to jointly develop automotive lithium-ion batteries.
In 2014, Foxconn and BAIC Group jointly invested in the development and production of power batteries and systems. In the same year, Taiwan Li-Ka Shing Technology invested ¥2 billion to establish a lithium-ion battery production line in Anhui, China, expanding its investments in the lithium-ion battery field to multiple provinces and cities.
In 2017, Foxconn's subsidiary Forteq Holdings invested ¥1 billion to acquire a stake in Ningde Times New Energy Technology Co., Ltd. The cooperation between the two parties mainly focused on advancing research in solid-state battery technology. In the same year, Foxconn invested in Solid Energy Systems (SES), a solid-state battery developer.
In 2021, Foxconn established the wholly-owned subsidiary SolidEdge Solution, which primarily focuses on the development of advanced battery materials and provides comprehensive solutions for solid-state batteries.
Since 2022, Foxconn has been actively expanding its battery business, gradually moving towards self-manufacturing, and planning capacity and timing on a global scale.
In January 2022, Foxconn announced a memorandum of understanding with the Indonesian Ministry of Investment, an Indonesian battery company, Indika Energy Group, and Taiwanese electric scooter supplier Gogoro. They planned to cooperate on various investments, ranging from battery manufacturing to the development of a complete ecosystem for four-wheeled and two-wheeled electric vehicles.
In March of this year, Foxconn Group Chairman Liu Yangwei announced that Foxconn would produce batteries and battery packs for energy storage systems in Wisconsin, USA, and battery packs for vehicles in Ohio.
On April 9th, Foxconn announced plans to invest NT$25 billion (approximately $900 million) over the next three years in the construction of electric buses and power battery factories in Kaohsiung, southern Taiwan.
Liu Yangwei stated that Kaohsiung would become a significant base for Foxconn's global electric vehicle expansion. In terms of batteries, Foxconn plans to focus on lithium iron phosphate (LiFePO4) vehicle batteries in Kaohsiung and the production capacity is expected to reach 1.2 GWh in the third quarter of 2024. The construction of the Qiaotou Science Park is expected to start in 2024, with a production capacity of up to 3 GWh by the end of 2025.
It is worth noting that although Foxconn has not disclosed the timeline for its collaboration with Blue Solutions, it previously announced its plans to launch its first commercial solid-state battery in 2024.
Overall, 2024 is a crucial milestone for Foxconn's battery production, and it remains to be seen how Foxconn will perform and how the market will respond.
Foxconn's Goal: 5% Market Share in the Electric Vehicle Industry by 2025
In November 2019, Foxconn officially announced its "3+3" long-term development strategy, focusing on three future industries: electric vehicles, digital health, and robotics, and three key technology areas: artificial intelligence, semiconductors, and next-generation communications, as the company's next stage of growth.
In terms of the electric vehicle industry, Foxconn has been involved in over ten electric vehicle projects through acquisitions, investments, and collaborations. Its footprint has expanded from China to Indonesia, the Middle East, and its investments cover entire EV ecosystems, including whole vehicles, battery materials, and intelligent cockpits. Additionally, Foxconn acquired a former General Motors factory, giving it its first automotive manufacturing facility.
To date, Foxconn has unveiled six electric vehicle models: Model B, Model V, Model C, Model C Mass Production Version, Model E, and Model T, covering various categories such as SUVs, sedans, buses, and pickup trucks.
However, Foxconn previously stated that these models are not intended for the consumer market but rather serve as reference vehicles for brand customers. Nevertheless, during the Technology Day event last year, Foxconn announced plans to launch its first pure electric pickup truck, Model B, in China, Germany, and the United States in 2023.
Regarding future plans, Liu Yangwei set ambitious targets. By 2025, Foxconn aims to achieve a 5% market share in the electric vehicle industry, generate revenue of NT$1 trillion (approximately $36 billion USD) in the industry, and achieve an annual shipment volume of 500,000 to 750,000 vehicles.
In Conclusion
Cross-industry moves into electric vehicles and battery manufacturing by electronics, home appliance, and clothing companies have become increasingly common. The primary reason for this trend is that these companies face sluggish growth in their core businesses and need to explore new growth markets. The electric vehicle sector has seen robust growth in recent years, coupled with strong government support, making it an attractive choice.
The general consensus is that the automotive industry has entered a consolidation phase, with a limited window of opportunity for growth, estimated at 3-5 years. The same trend applies to the power battery industry, which is also heading towards differentiation.
Whether Foxconn can successfully establish itself in the electric vehicle industry remains to be seen. The market is eagerly awaiting its performance and achievements in this rapidly evolving sector.
Request a Quote
