Foxconn and Xiaomi attack Tesla
Master plan
Huawei self-driving car
© press-inform – the press office
The automotive industry is in a state of unprecedented upheaval. With the Taiwanese contract manufacturer Foxconn and the Chinese tech group Xiaomi, two new players are getting involved in the business of electric cars that have the potential to be successful.
Building a car costs money. A lot of money. If this is available, a lot of knowledge and experience is required. Developing a competitive car with the help of engineering service providers, putting it on its wheels and then presenting it to the public is one thing, it is another to establish reliable series production. Some start-ups such as Byton have already failed because of this. Capgemini expert Peter Fintl, referring to Elon Musk, describes this as the “production hell” through which Tesla has made it. But also not without pain, which still causes after-pains. Once this hurdle has been overcome, the point is to arouse desires. “How to create a pleasant user experience around this product and thus build a brand that is then correspondingly attractive is the key question for all newcomers,” explains Peter Fintl. Simply putting an electric car down is no longer enough. The established automakers have woken up and are trying with all their might to catch up on the lead of the Californians. The waters for new car manufacturers are increasingly choppy.
And in this shark tank do Xiaomi and Foxconn want to be successful? These are strange waters for both companies. The Chinese company Xiaomi is better known for smartphones and Foxconn has made a name for itself as an Apple contract manufacturer. “The successful market entry of both companies is not a foregone conclusion,” warns Fintl. Foxconn is already nailing it and has bought the factory of the ailing US electric car maker Lordstown in Ohio and will produce the Endurance electric pick-up there. The Taiwanese also want to build an electric car with Fisker. Earlier this year, Foxconn signed an agreement with Volvo’s Chinese parent company Geely and Japanese electric motor specialist Nidec. Foxconn also got involved in the economically troubled car manufacturer Byton. After all, there is a lot of knowledge to be found there. Those who enter into such alliances not only sound out the water, but attack on a large scale. Especially since Foxconn’s automobile subsidiary Foxtron with the model E sedan cast by Pininfarina, the model C crossover and the model T bus.
“Foxconn is a huge production machine that also masters complex processes and is also familiar with global logistics. That is an incredible advantage,” says Peter Fintl and adds: “Of course, Foxconn can also develop electronics and software.” Things look different with Xiaomi, but not necessarily worse. The expertise of the Chinese group is the user experience and the user interface, as you can see on the smartphones. “They are almost as good as Apple. Xiaomi has the huge advantage of being able to use the software to pour its proven strengths in user experience and product functionality into a mobility product,” says Peter Fintl, classifying the expertise of the Chinese. Established carmakers see it that way too. Foxconn is to develop digital cockpits for the multi-brand company Stellantis. The experience from this cooperation will certainly help the development of your own vehicles.
“Foxconn made a number of acquisitions and deals to ensure the company would be able to build all of these electrified vehicles,” said Bakar Sadik Agwan. The company has also entered into a partnership with the state-owned PTT PLC, which aims to bring electric vehicles to market by 2023. In addition, Foxconn has signed an agreement with the Taiwanese Giga Solar Materials group for battery raw materials worth around 36 million US dollars, and solid-state cells are to be installed in the electrical platforms from 2024.
Foxconn already has cars on the road. Xiaomi still lags a little behind in this aspect. Only in the spring of this year, Xiaomi boss Lei Jun announced the founding of an automobile manufacturer that should have vehicles ready for series production in the first half of 2024. Nevertheless, the omens also look good with Xiaomi. Especially since the Middle Kingdom company could play an important role in realizing China’s geopolitical ambitions. On the one hand to become economically self-sufficient and on the other hand to implement the principle “from China for the world”. It is quite possible that Xiaomi will bring its abilities to the fore in cooperation with a local car manufacturer and thus a Chinese Tesla hunter will be lifted from the baptismal font. Against the background that the Chinese government is currently using a kind of economic Darwinism to select precisely which car manufacturers can contribute as much as possible to the economic prosperity of the People’s Republic in the future. Only one of the five state-owned automobile manufacturers can then be considered as a possible spouse. But Borgward is also a possible candidate.
This regulation makes perfect sense from Peter Fintl’s point of view, who sees the flood of new Chinese carmakers drying up: “This wild growth will come to an end.” It was often the provincial governments that supported the automotive start-ups. After all, automobile factories are job machines that are popular with the economic upturn in the individual regions. If the dream of a global car manufacturer bursts like a soap bubble, the scars will be visible for a long time. Another player in the grand plan to make China the number one automotive nation is Huawei. The tech group recently brought an automobile platform to the IAA Mobility that demonstrates autonomous driving. The vehicle for this has been around for a long time with the electric SUV Seres Huawei Smart Selection SF5. Now the Chinese want to be at the forefront of technology when it comes to robo-cars. The mobile phone specialists undoubtedly have the network experience. The formula for success could therefore be: user experience plus technological know-how plus classic production results in a globally competitive automobile manufacturer.