IPhone Assembler Foxconn Sets Up Auto Arm as Apple Car Looms

(Bloomberg) -- Apple Inc.’s Taiwanese manufacturing partner Foxconn Technology Group is setting up a car venture, strengthening its automotive capabilities at a time when technology companies including its California ally are looking to expand in vehicles.

Foxconn is joining forces with Chinese carmaker Zhejiang Geely Holding Group Co. to provide production and consulting services to global automotive enterprises, according to a statement from the companies Wednesday.

Amid reports of Apple considering making its own electric vehicles, Foxconn has been bulking up its automotive muscles swiftly. Such moves may help the company become a major contender to make cars for its largest customer.

With development work still at an early stage, Apple will take at least half a decade to launch an autonomous electric vehicle, people with knowledge of the efforts have told Bloomberg News. That suggests the company is in no hurry to decide on potential auto-industry partners. Last week, Hyundai Motor Co. backed away from a statement confirming it is in talks with Apple, saying it had been contacted by potential partners for the development of autonomous electric vehicles.

Foxconn, whose main listed arm is Hon Hai Precision Industry Co., in October unveiled its first-ever EV chassis and a software platform aimed at helping automakers bring models to the market faster. It plans to deliver its first development kit in April, with Hon Hai Chairman Young Liu saying EV-related business in the first half will be “very good”. Meanwhile, Foxconn’s key unit Foxconn Technology Co. is reportedly expanding a plant to develop automotive metal parts.

Earlier this month, Foxconn signed a manufacturing deal with embattled Chinese electric-vehicle startup Byton Ltd. with the aim to start mass production of the Byton M-Byte by the first quarter of 2022.

An Apple car would rival electric vehicles from Tesla Inc. and offerings from companies such as upstart Lucid Motors and established manufacturers like Daimler AG and Volkswagen AG. Setting up a car plant can cost billions of dollars and take years, likely the reason why Apple is talking to potential manufacturing partners.

Apple has continued to investigate building its self-driving car system for a third-party auto partner rather than its own vehicle, the people familiar have said, and the company could ultimately abandon its own car efforts in favor of this approach.

Other technology companies seeking to expand into the autonomous driving space have also sought partnerships. Alphabet Inc.’s self-driving unit Waymo has worked with Chrysler, while Amazon.com Inc. has tapped Rivian Automotive Inc. for cooperation over delivery vans.

This week, billionaire Li Shufu’s Geely struck a pact with search-engine giant Baidu Inc. to set up a venture to make intelligent electric vehicles.

Li, who is also Daimler’s largest shareholder, has championed partnerships and consolidation as a way for automakers to pool resources for initiatives like self-driving cars and electrification. He’s built a global carmaking empire over the past two decades, securing stakes in European legacy brands such as Lotus as well as investing in Malaysian auto company Proton.

(Updates with other partnerships in seventh paragraph.)