Foxconn to build electric vehicle startup Fisker

Although the exact location has yet to be determined, Henrik Fisker, CEO of Fisker, said the initial production in the US is very good, in part because Foxconn already has a factory in Wisconsin.

“They have a factory there and a lot of land with a lot of potential for expansion,” he said in an interview. “We have not yet made a final decision on that, but it goes without saying.”

Shares in Fisker rose about 17% on the news and traded around $ 19 on Wednesday morning.

The Foxconn partnership is for Fisker’s second model – a higher volume electric car that the carmaker wants to start building in the fourth quarter of 2023, the companies said. The car would be built on the substructure of vehicles developed by Foxconn and sold in North America, Europe, China and India.

For Foxconn, the Fisker agreement is the latest in a series of connections with automakers that jointly develop or build vehicles, including the then Fiat Chrysler Automobiles NV.

– now Stellantis NV – and the Chinese Zhejiang Geely Holding Group.

In recent years, some electric vehicle start-ups, such as Fisker, have focused on designing cars while outsourcing vehicle production, a challenge to the traditional business model in the automotive sector, in which established car manufacturers have designed and manufactured their own vehicles. .

The agreement with Fisker is the first in which Foxconn will actually manufacture the vehicles, and the first with an American company in the United States.

The automotive industry is facing a spate of new technology ventures and start-ups that want to break into the enterprise, and it is driven in part by new technologies such as electric motors and autonomous driving that are reforming the competitive landscape. Among them is Apple Inc.,

who worked for years to develop his own car and recently held talks with Hyundai Motor Group to assemble an autonomous vehicle at a Kia Corp. plant in Georgia. The talks have since broken down, reports The Wall Street Journal.

Foxconn, formally known as Hon Hai Precision Industry Co., sought to diversify beyond the core business of contract manufacturing for electronics.

Various efforts have also been made to expand manufacturing in the United States. In 2017, Foxconn said it would invest $ 10 billion to build a Wisconsin show factory to manufacture large-screen televisions and other devices, a project praised by President Donald. Trump. But since then, Foxconn has scaled down its ambitions to a smaller facility that would make smaller touchscreens, and it has been in a dispute with government officials in Wisconsin over the scope of the project.

In October, Wisconsin officials said Foxconn could not create enough jobs in 2019 to receive subsidies. Foxconn then said it had reached more than 520 people’s employment levels – the minimum required for subsidies – and that it had invested $ 750 million in Wisconsin. , which includes more than half a billion dollars for the factory.

Foxconn recently launched a new project to offer a customizable set of basic technologies that manufacturers can use to develop electric and self-driving cars.

The company said earlier this year that the initiative, called MIH, would be led by a co-founder of Chinese electric car company NIO Inc.

Fisker has been a wave of investor enthusiasm for pure electric vehicle businesses over the past year. It was founded in 2016 by mr. Fisker, a well-known designer who previously worked at BMW and Aston Martin.

Unlike other beginners who have their own plants or are building, Fisker takes a light-hearted approach to the development of his business and relies on contractors to provide everything from manufacturing to service and maintenance centers. Managers say it will help them bypass the billions of dollars in capital car manufacturers that usually spend on assembly plants.

“The last thing an EV company has to do is build its own factory,” he said. Fisker told the Journal last year. “I think it’s really a stupid idea.”

Fisker rather focuses on design, software and engineering. For its debut model, a luxury sports utility vehicle called the Ocean, which will be launched at the end of next year, he will contract the vehicle manufacturing to the car supplier Magna International Inc.

The company went public in October after merging with a specialty venture backed by private equity giant Apollo Global Management Inc.

Its stock closed at $ 16.29 a share on Monday, up 82% from the merger.

The company, which has informed investors that it expects its first earnings in 2022, will keep investors informed of the results of its first quarter as an exchange-traded company after the close on Thursday.

Write to Ben Foldy at [email protected] and Stephanie Yang at [email protected]