Hon Hai to make electric car market headway
Hon Hai Precision Industry Co. (
), the world’s largest electronics contract manufacturer, has set its eyes on the electric vehicle market, and aims to be a leading parts and components supplier in the industry.
The effort falls under Hon Hai’s grand plan to wade into the car industry. However, the company will not assemble whole cars or launch a car brand. Instead, the focus will be on providing a parts and components platform.
that with its investment, electric vehicle prices may be reduced to US$15,000 in the future.
Industry analysts are optimistic, and forecast further growth in sales in the next few years for electric vehicles, hybrid electric vehicles and plug-in hybrid electric vehicles.
Wading into the electric vehicle field is a pivotal link of the electronics giant’s ambition to advance its proclaimed “11 Panels, 3 Networks, 2 Clouds” objective — an umbrella of technologies that includes virtually every device with panels (smartphones, TVs, laptops, etc.), network applications (like the Internet Things) and cloud computing.
Hon Hai has a very clear development blueprint on electric vehicles. The focus will be on critical parts and components supply.
Preparation Work Laid out
Hon Hai is reportedly looking into telematics, a field encompassing telecommunications, vehicular technologies, road safety and transportation, electrical engineering (sensors, instrumentation, wireless communications, etc.) and computer science (multimedia, Internet, etc.).
Or more specifically, the company is interested in entertainment-related applications. A central control panel in the car can enable shopping, plane ticket booking, or movie viewing. It merges Internet, Internet of Things, and connected car concepts.
The company is also capable of producing most electric vehicle parts and components. It has a lithium-ion battery reinvestment business, owns moulds for casting and welding, and possesses aluminum stamping, glass processing and other technical know-how. It is also edging toward central control system and battery mould mastery.
Looking at electric vehicles’ cost structure, the battery makes up 40-50 percent of costs, the largest of all.
A Focus on Mainland China
The Chinese market is considered of great importance to Hon Hai, and it has invested in a Beijing company that leases electric cars.
It has set up a facility in Shanxi Province, where industrial robots, automation equipment, precision cutters, optical instruments, etc. are put in place.
There is also a reinvestment business in Chongqing, which focuses on designing and manufacturing car moulds, clips and gauges.
In March, Hon Hai signed a strategic alliance agreement with China’s Tencent and China Harmony Auto Holding. The group will embark on a project nicknamed “Internet + Smart Electric Vehicle.”
A car executive predicts that with Hon Hai joining the market, electric prices will fall to the US$15,000 level.