Why iPhone Maker Foxconn And Vietnam’s Vingroup Could Team Up On Electric Vehicles

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Foxconn, the world’s largest contract assembler of consumer electronics, has begun discussions with Vingroup, the most important conglomerate in Vietnam, about working together within the fast-growing field of electrical vehicles.

A spokesman for Hanoi-based Vingroup confirmed that the corporate had “received proposals” from Foxconn but said that “nothing is concrete yet.” Any partnership would specialise in developing electric vehicle batteries and other parts, he adds. “No decision on working together to supply EVs has been made yet,” he says.

Reuters reported on Friday that Foxconn has proposed acquiring EV production lines owned by Vingroup’s automotive unit, VinFast. VinFast prefers a partnership that might help brand itself as an eco-friendly automaker and needs to retain its EV business, consistent with the Reuters report.

“Foxconn views electric vehicles as a promising new growth driver for the corporate ,” says Chris Robinson, a senior analyst with Lux Research. “It has developed a platform of technologies upon which other companies can build cars around. Use of an existing platform would allow VinFast to succeed in the market faster and spend less time and money on designing a powertrain,” he says.

A deal would make each billionaire-run company more competitive during a fast-growing, competitive sector. the worldwide electric vehicle market stood at an estimated $140 billion in 2019 and will reach $700 billion by 2026, research firm Facts & Factors says during a report released in January.

Both companies have already worked on EVs. Foxconn signed a memorandum of understanding last month with Los Angeles-based EV startup Fisker Inc. to sell as many as 250,000 vehicles in China, Europe, India and North America. Foxconn had agreed before to create electric cars with Fiat Chrysler and Geely, among other carmakers. the corporate are going to be ready to use existing assembly technology to compete.

Billionaire Terry Gou founded Foxconn, also referred to as Hon Hai Precision, 47 years ago and therefore the company now sees $172.8 billion in annual sales. the corporate best referred to as an Apple contractor has tried over the past decade to diversify product lines. Foxconn has set a goal of taking 10% of the worldwide EV market between 2025 and 2027. Foxconn didn’t answer an invitation for comment.

Vingroup car-making unit VinFast will introduce its own electric, self-driving sport-utility vehicles this year with Tesla-like features at a lower cost , the deputy CEO said in January. The parent company led by Vietnam’s richest person, Pham Nhat Vuong, had debuted electric scooters two years ago within the home market. Other Vingroup units develop housing, build resorts and make smartphones. Annual sales come to $5.6 billion.

The conglomerate calls EVs “part of VinFast’s predetermined roadmap since joining the auto market three years ago.” they’re going to increase VinFast’s popularity and help control emissions, the corporate says.

Foxconn and Vingroup aren’t total strangers either. the 2 leveraged manufacturing capacity last year to figure with New York-listed ventilator developer Medtronic on making ventilators that help keep Covid-19 patients alive.

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