Taiwanese electronics giant Foxconn is looking at making electric vehicles in India, part of a larger diversification plan to expand its Asian manufacturing supply chain beyond China, according to people aware of developments at the contract phone maker for Apple.
Foxtron—the company’s EV venture—may consider manufacturing in India in addition to other locations in South East Asia such as Vietnam and Indonesia, they said.
At present, in addition to an exclusive facility — outside Chennai — manufacturing Apple’s phones, Bharat FIH, formerly known as Rising Stars Mobile India, a Foxconn Technology Group Company operates another unit nearby, which manufactures phones for Chinese brands including Xiaomi.
“Foxconn has evinced interest as a group in manufacturing other lines — their own (and) for their clients — apart from the phones that they currently manufacture,” a person in the know who did not wish to be named told.
Sources aware of the matter said that the Tamil Nadu government is looking to woo the conglomerate to further invest in the state. “They have expressed an interest in EV manufacturing, so we have told them that Tamil Nadu is the place to be,” the person added.
Electric vehicles are a relatively new segment for Foxconn. Last year, it bought a factory in the US to produce electric vehicles for the North American market and will also use the plant to contract-manufacture for customers like hybrid EV brand Fisker. In future, Foxconn will look to replicate this localisation model elsewhere in other markets such as South-East Asia, the company said in its annual report for 2021.
A second official who spoke on the condition of anonymity said the Taiwanese major is also eyeing the potential demand for EVs in the Indian market.
“Initially there was no plan to manufacture in India but recently Foxconn has been studying the Indian automotive market and is considering foraying into India as well as Vietnam and Indonesia to expand its manufacturing base to other markets,” said one person cited above.
According to a release from Federation of Automobile Dealers Association (FADA), sales of passenger electric cars in the country jumped over 2.5 times to 17,804 units in FY22, underscoring strong demand for green variants.
Foxtron’s interest in EV manufacturing in India comes even as American EV maker Tesla finds itself in a tussle with the government over manufacturing its iconic cars in the country.
Tesla CEO Elon Musk on May 28 said that his company will not manufacture electric cars in India unless it is allowed to first sell and service them locally.
The central government, however, has remained steadfast in its demand that the automotive giant must not import cars from China.
“Our request to him (Musk) is to come to India, and start manufacturing here. India is a huge market, there are exports and ports available. He can make his exports from India and he is welcome and they do not have any problem. But suppose you want to manufacture in China and sell in India then that will not be a good proposition for India,” minister for road transport & highways, Nitin Gadkari, said earlier this month.
Musk on his part has repeatedly highlighted India’s high import duties on vehicles as being the biggest hindrance for Tesla to enter the Indian market amid reports of his growing interest in opting for Indonesia instead as the company’s new manufacturing hub.
Foxconn had showcased three EVs it developed indigenously: a premium business sedan, an SUV, and a bus at the Hon Hai Tech Day last year. In its 2021 annual report, Foxconn said consolidated revenues jumped 12% to touch $203.7 billion despite a tough year marked by “uncertainties in the workflow and supply chain” caused by the Covid-19 pandemic.
In the report, Foxconn also laid out a pan-national electric vehicle supply chain that will involve local partnering and targeting of local markets, part of its ‘de-globalisation and regional manufacturing’ agenda. “We have begun cooperation with Thailand PTT to establish and cultivate the electric vehicle industry in Thailand and will commence building a factory this year. We have also cooperated with Indonesia and Saudi Arabia and will also build EV and battery related supply chains in these two countries in the future,” said the report.
Pankaj Mohindroo, chairman of Indian Cellular and Electronics Association, said the growing interest in EV manufacturing in India follows the success story of foreign players making electronics devices in India.
“Manufacturing moves to the most competitive geographies,” he said. “With its slew of policies India has emerged as a strong contender for electronics and even EV supply chains and manufacturing. The two sectors — electronics and EV — are very alike and therefore the big thrust of electronics supply chain players into EV supply is a natural extension.”