The electronics giant Foxconn is taking a larger step into the car industry. Electrek reports that Foxconn is buying half of Mitsubishi Electric's auto parts business for ¥115 billion, or about $727 million, describing it as the company's biggest bet yet on turning years of EV promises into a real car business. The deal was reported on Monday.
The target is Mitsubishi Electric Mobility, which Electrek stresses is not an EV company. It is a traditional Tier 1 supplier that makes components ranging from alternators and ignition coils to radar sensors, with a smaller electric powertrain business attached. That mix gives Foxconn established customer relationships, manufacturing know-how and sensor technology, though it also means the business depends on combustion-era products.
I have only seen the summary, so I do not know the structure of the joint venture, the regulatory approvals required or the timetable for completion. Foxconn has been trying to enter the electric vehicle market for several years, through its Foxtron unit and partnerships with automakers, and buying a supplier is a way to gain scale and credibility.
For the industry, the deal shows how technology companies and traditional suppliers are combining. Carmakers are looking for partners who can deliver electronics, software and electric systems, and suppliers want new capital and growth areas. For workers and customers of Mitsubishi Electric Mobility, the main question is how the partnership will affect operations. Watch for the completion of the deal, any announcements about new products and Foxconn's plans for its own vehicles.
