Foxconn is set to host its fifth annual Hon Hai Tech Day on October 8-9, where it will showcase its latest electric vehicle (EV) developments. At a pre-event press conference on October 1, the company announced plans to debut a multi-passenger minibus, dubbed Model U, in addition to the previously unveiled SUV-like Model D.
Disruption spurs new business model
Foxconn noted that recent disruptions in the electric vehicle industry have bolstered the prospects for its Contract Design and Manufacturing Services (CDMS) business model. The company actively engages with brand manufacturers and anticipates progress in these negotiations soon.
Historically, the PC industry followed a vertically integrated model, with brands managing everything from design to production. However, as market competition intensified and prices plummeted, Taiwanese ICT companies expanded into outsourced manufacturing, creating a new industrial chain.
This model, particularly in the smartphone sector, saw many brands initially forgo in-house production lines, instead adopting specialized divisions for different tasks. This allowed companies to focus on research, design, and customer experience while outsourcing production to industry experts.
Foxconn draws parallels between the current EV market turmoil and the early trajectory of the PC industry. While some automakers are scaling back investments in electric vehicles, Foxconn remains confident that the long-term growth of the EV sector is inevitable, presenting more opportunities for the company.
Earlier in 2024, Foxconn revealed that it had entered negotiations with several traditional automotive brands and expressed hope for concrete outcomes from these talks soon.
Foxconn's electric vehicle lineup continues to expand. Following the release of models C, E, T, B, and V, the addition of Model D and Model U in 2024 is aimed at creating a more comprehensive product range, offering clients a wider array of options.
The automakers Foxconn is engaging with have robust internal combustion engine (ICE) vehicle lines but lag behind in electric vehicle offerings. With Foxconn's resources, these companies can accelerate the development and production of new EV models. Foxconn expects to announce more tangible progress by the end of 2024.
