"Contractor" enters solid-state batteries

On October 2, the official website of Hon Hai Technology Group announced that it has signed a memorandum of cooperation with Blue Solutions, a Canadian solid-state battery design and manufacturer. Hon Hai will use its SolidEdge Solution and Blue Solutions to jointly develop for the two-wheeled electric vehicle market. Create a solid-state battery ecosystem and plan to promote the application of solid-state battery systems in other electric vehicles in the future .

It is reported that the cooperation between Blue Solutions and Hon Hai will first target the Indonesian market because of the huge market in Indonesia in the future. According to Indonesia's plan, the country aims to have 13 million electric motorcycles by 2030.

At the same time, according to McKinsey estimates, the global two-wheeled vehicle market will be worth US$218 billion by 2029, with an annual growth rate of 8.7%. The main growth momentum will come from electric motorcycles.

With the implementation of the solid-state battery cooperation plan, Hon Hai has officially formed two major power battery technology paths.

"Walking on two legs"

Hon Hai Technology Group is the parent company of Foxconn. Founded in 1974, it is an international group in the global 3C (computer, communications, consumer electronics) OEM field. The most famous cooperation is to OEM for iPhone, so he won the title of "Contractor" and "OEM King".

However, there is no such thing as a hundred days of prosperity. The smartphone market has begun to shrink since 2016, iPhone performance has shown a downward trend, and Foxconn's life has become increasingly difficult, with revenue growth beginning to slow down significantly. In order to create a second growth curve, Hon Hai plans to build cars.

As the core component of electric vehicles, Hon Hai has always attached great importance to power batteries. At the first Technology Day in 2020, Hon Hai publicly stated that the top three cost components of electric vehicles are power batteries (30%-35%), electric drive systems (20%-25%), Automotive electronics (15%-20%).

Relatively speaking, electric drive systems and vehicle electronics are the parts that are most conducive for Hon Hai to use its own superior resources to tackle difficulties, while power batteries are the hole that Hon Hai most wants to break through.

Before officially making its own batteries, Hon Hai accumulated battery technology and manufacturing experience through cooperation, foreign investment, etc., and followed the strategy of "walking on two legs" of lithium iron phosphate batteries and solid-state batteries, which also laid the foundation for later development. The foundation was laid for the implementation of the plan.

In 2011, Hon Hai Group entered the field of power batteries. Its subsidiary Taiwan Lithium Technology Company signed a contract with Shanghai Electric Group and jointly developed automotive power lithium batteries .

In 2014, Foxconn and BAIC Group jointly invested in the development and production of power batteries and systems; in the same year, Taiwan Lithium Technology Company invested 2 billion yuan to establish a lithium battery production line in Anhui. Later, its investment in the lithium battery

In 2017, Futaihua Industrial Company, a subsidiary of Hon Hai, invested 1 billion yuan in CATL . The cooperation between the two parties focused on promoting the research process in the field of solid-state batteries; in the same year, it invested in solid-state battery developer Massachusetts Solid Energy Company (SES).

In 2021, Hon Hai established a wholly-owned subsidiary, Xinliang Technology, which mainly develops advanced battery materials and provides customers with a full range of solid-state battery solutions.

Since 2022, Hon Hai has frequently deployed its battery business, gradually entered the self-manufacturing stage, and began to gradually implement production capacity scale and time planning on a global scale.

In January 2022, Foxconn announced that it had signed a memorandum of understanding with the Indonesian Ministry of Investment, Indonesian Battery Company, Indika Energy Group and Taiwanese electric scooter supplier Gogoro, planning to build an ecosystem from battery manufacturing to four-wheeled and two-wheeled electric vehicles. Cooperate with a series of investments including.

In March this year, Hon Hai Group Chairman Liu Yangwei announced that Foxconn will produce batteries and battery packs for energy storage systems in Wisconsin, USA, and battery packs for complete vehicles in Ohio.

On April 9, Foxconn announced plans to invest NT$25 billion in the next three years to build a new electric bus and power battery factory in Kaohsiung, a city in southern Taiwan, China.

Liu Yangwei said that Kaohsiung will become an important base for Foxconn to deploy global electric vehicles. In terms of batteries, Foxconn plans to focus on lithium iron phosphate vehicle batteries in Kaohsiung Hefa Industrial Park , with mass production of 1.2GWh expected in the third quarter of 2024; Qiaotou Science Park is expected to start construction in 2024, with mass production reaching 3GWh by the end of 2025.

It is worth noting that although Hon Hai did not disclose the time plan for cooperation with Blue Solutions this time, as early as the first Technology Day, Hon Hai officially announced that it will launch its first commercial solid-state battery in 2024.

Overall, 2024 is a key node for Hon Hai's battery mass production. It is exciting to see what answers Hon Hai will deliver by then and what the market response will be.

Hon Hai’s goal: electric vehicle market share of 5% in 2025

Hon Hai has officially announced the "3+3" long-term development strategy in November 2019, which is to focus on the three future industries of electric vehicles, digital health, and robotics, and the three key technology areas of artificial intelligence, semiconductors, and new generation communications. New momentum for development in the next stage.

In terms of the layout of the electric vehicle industry, Foxconn has acquired, invested, and cooperated with more than 10 electric vehicle projects so far. The scope of the layout has expanded from China to Indonesia and the Middle East. The investment areas range from complete vehicles to battery materials to smart cockpits, and Foxconn It also owned the first automobile factory by purchasing the old General Motors plant.

Currently, Foxconn has released six electric models, namely Model B, Model V, Model C, Model C production version, Model E, and Model T, covering multiple categories of SUVs, cars, buses, and pickup trucks.

However, Foxconn has stated that these models are not intended for the C-end consumer market, but are used as prototypes for brand customers as a reference. However, at last year’s Technology Day, Hon Hai stated that its first pure electric pickup truck, the Model B, plans to be launched simultaneously in China, Germany and the United States in 2023.

In terms of future planning, Liu Yangwei has set a goal that by 2025, the electric vehicle market share will reach 5%, the industry revenue will reach NT$1,000 billion, and the shipment volume will reach 500,000-750,000 vehicles per year.

Summarize

It is not uncommon for electronics, home appliances, and clothing companies to cross-border manufacturing of cars and batteries. The primary reason is that the growth of the main business is weak and there is an urgent need to open up new incremental markets. In recent years , new energy vehicles have enjoyed a relatively high boom and have frequently received policies. With strong support, it has naturally become a popular choice.

The current consensus is that the automobile industry has entered the knockout stage, and the window of opportunity for the industry is only 3-5 years. The same is true for the power battery industry, which is about to enter a stage of differentiation.

We will wait and see whether Hon Hai can achieve greater success in the field of electric vehicles.