MITSUBISHI

Mitsubishi Motors may outsource electric vehicle production to iPhone maker Foxconn

China's Foxconn is close to closing a deal with Mitsubishi Motors to produce electric vehicles, marking a major step in its entry into the automotive sector.

The world's largest electronics manufacturer, based in Taiwan and famous for the iPhone, is expected to announce the agreement in the coming weeks, allowing Mitsubishi to expand its line of more affordable electric models.

The partnership represents a significant shift for the automotive industry, which is facing China's leadership in electric cars and the growing importance of software in vehicles.

Mitsubishi sees advantages in the partnership, such as reducing development and production costs, in addition to expanding its car line.

The Japanese automaker did not comment on details, but said it "explores opportunities for collaboration for sustainable growth." Foxconn also remained tight-lipped about the deal.

This strategy of joining forces with a well-capitalized company with experience outside the automotive sector is an alternative to traditional mergers and alliances between automakers.

The deal comes after Honda and Nissan, Mitsubishi’s second-largest shareholder, failed to merge. Foxconn, which is already a partner of Nissan and Renault, has sought to acquire a stake in the struggling Japanese automaker. 

The Mitsubishi deal could pave the way for a future tie-up with Nissan, but the outlook remains uncertain as Nissan is in the process of choosing a new CEO. Foxconn, known for making components for companies including Apple, has been building an electric vehicle business since 2019, aiming to become the “Android of electric cars.” 

Its supply chain and large-scale production expertise could help automakers cut costs, shorten development timelines and speed up the time new models arrive on the market. 

Foxconn Chairman Young Liu recently said a deal with a Japanese automaker is likely to be finalized in “one to two months.” Mitsubishi Motors Corp. 

Mitsubishi Motors Corp. rose in Japanese markets on Friday after local media reports that the company plans to outsource electric vehicle production through a partnership with Taiwan’s Hon Hai Precision, or Foxconn.

 Mitsubishi rose as much as 3.5% to 465.8 yen, outpacing a 0.2% rise in the Nikkei 225 Index. Foxconn’s Taiwanese shares fell 0.3%. Japan’s Kyodo news agency reported that Mitsubishi will seek to reduce production costs and increase development speed through the partnership as Foxconn seeks to secure a foothold in electric vehicle production. 

Foxconn said on an earnings call last week that it expected to sign an electric vehicle deal with a Japanese automaker in the next two months. The company has previously expressed interest in working with Nissan, Mitsubishi’s largest shareholder, especially after a failed merger between Nissan and Honda this year.

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