The Nikkei Asian Review reported that approximately 100 Japanese companies will participate in the joint development of electric vehicles led by Foxconn, including Toyota Motor suppliers, representing a significant impact on the auto industry.
As of early March, approximately 2,200 companies have participated in the Foxconn-led project. Compared with the launch of the project in April 2021, the total number of participating companies has increased by 70%, and the number of Japanese companies has increased fivefold. Some companies have started developing components with Foxconn and others.
Japanese companies Nidec, NSK and other auto parts makers, as well as major material and electronics suppliers such as Asahi Kasei, Showa Denko, and Toshiba will all participate. In the case of Asahi Kasei, it is preparing to provide materials for jointly developed electric vehicle interiors. Companies with close ties to major Japanese automakers are also involved, such as Toyota suppliers Denso, JTEKT and Toyota Tsusho, and FCC which has close ties to Honda Motor. Denso will develop motors and other equipment and Toyota Tsusho will also work hard to develop lithium materials for batteries.
Foxconn announced their electric vehicle platform plan in October 2020 and the core companies will jointly develop the EV body and communication infrastructure. Other participating companies will sell the electric vehicle components and systems that Foxconn has contracted to produce and use design materials for free. Through these basic software and chassis designs, products are customized for Foxconn's target market.
According to British research firm LMC Automotive, by 2030, electric vehicle sales will increase sevenfold from 2021 to approximately 33 million units. Various industrial companies have entered the market successively. Japan's SONY Group has decided to partner with Honda and Foxconn has enabled customers who want to develop their electric vehicle business to own and sell their own electric vehicles without building their own factories. This approach is similar to digital consumer electronics, where companies focus on software development and product production is left to contract manufacturers and this model is expected to be widely adopted.
Major automakers have combined with many component companies to form a pyramid structure. Electric vehicles do not use engines, reducing the number of components by 40% to 50%, simplifying production, and reducing the relationship between automakers and suppliers. Microsoft and Samsung Group have also participated in the Foxconn electric car project which may become an important turning point in the development of the global auto industry.
(Image: Foxonn)