Foxconn to build cars for Fisker, an electric vehicle startup

Although the exact location has not yet been determined, Fisker Chief Executive Henrik Fisker said there is a good chance that initial production will be in the United States, in part because Foxconn already has a plant in Wisconsin.

“They have a factory there and a lot of land with a lot of possibilities for expansion,” he said in an interview. “We have not yet made a final decision on this, but it is obvious.”

Fisker’s shares were up about 17% on the news and traded at around $ 19 on Wednesday morning.

Foxconn’s collaboration is for Fisker’s second model – a larger volume electric car that the automaker plans to start building in the fourth quarter of 2023, the companies said. The car would be built on vehicle bases developed by Foxconn and would be sold in North America, Europe, China and India, they added.

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

—Now Stellantis NV – and China’s Zhejiang Geely Holding Group.

In recent years, some electric vehicle startups like Fisker have focused on car design while outsourcing vehicle production, in a challenge to the traditional automotive business model, in which established automakers design and produce their own vehicles.

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

The auto industry is facing a wave of new technology companies and startups looking to enter the market, an effort driven in part by new technologies such as electric cars and autonomous driving, which are reshaping the competitive landscape. Among them is Apple Inc.,

who worked for years to develop his own car and recently held talks with the Hyundai Motor Group to assemble an autonomous vehicle at a Kia Corp. plant. in Georgia. Since then, negotiations have been halted, The Wall Street Journal reported.

Foxconn, formally known as Hon Hai Precision Industry Co., has sought to diversify beyond its core electronics manufacturing business.

It has also made several attempts to expand manufacturing in the USA. In 2017, Foxconn said it would invest $ 10 billion to build a liquid crystal display factory in Wisconsin to produce large-screen televisions and other devices, a project that was praised by President Donald Trump. But Foxconn has since reduced its ambitions to a smaller installation that would make smaller touch screens, and is in a dispute with Wisconsin officials over the scope of the project.

In October, Wisconsin officials said Foxconn was unable to create enough jobs to receive subsidies in 2019. Foxconn then said it reached job levels of more than 520 people – the minimum required for subsidies – and that it invested $ 750 million in Wisconsin, including more than half a billion dollars for the factory.

In boosting the automotive sector, Foxconn recently launched a new project to offer a customizable kit of basic technology that manufacturers can use to develop electric and autonomous cars.

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

Fisker is one of several automotive startups that generated a wave of investor enthusiasm for electric vehicle companies last year. It was founded in 2016 by Mr. Fisker, a well-known designer who has worked at BMW and Aston Martin.

Unlike other startups that have or are building their own factories, Fisker is taking a simple approach to growing its business, relying on contractors to supply everything from manufacturing to service and maintenance centers. Executives say it will help them get around the billions of dollars in capital that automakers traditionally spend on automakers.

“The last thing an EV startup should look for is to build its own factory,” Fisker told the Journal last year. “I think it’s a really stupid idea, frankly.”

Fisker focuses on design, software and engineering. For its debut model, a luxury SUV called Ocean scheduled to launch next year, it is outsourcing vehicle manufacturing to car supplier Magna International Inc.

The company began publicly trading in October after the merger with a special purpose acquisition company backed by private equity giant Apollo Global Management Inc.

Its shares closed Monday at $ 16.29, an increase of 82% since the merger closed.

The company, which told investors it expects its first earnings in 2022, is expected to update investors on its first quarter results as a publicly traded company after Thursday’s close.

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