(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

 

HONG KONG  - Foxconn's cars are revving up a lot of hype. The $53 billion iPhone-maker on Monday unveiled its first electric-vehicle prototypes as part of an ambitious pivot into autos. Founder Terry Gou's track record of overpromising is enough to warrant doubt. Look past the glitz and glamour, though, and Foxconn is making some serious progress.

The 71-year-old founder stepped down two years ago as chairman of Foxconn, formally known as Hon Hai Precision Industry, but Taiwan's most famous billionaire and one-time presidential hopeful is still very much in the picture. The company's annual Technology Day conference kicked off at 10:18 a.m. sharp on Oct. 18 to mark Gou's birthday; the former boss and 10% owner even drove a prototype sedan onto the stage while an orchestra serenaded him with "Happy Birthday" to much fanfare.

Celebrations aside, Gou's handpicked successor and current chairman, Liu Yong-way, has been quietly repurposing the world's top electronics contract manufacturer into an electric-vehicle-making powerhouse. Autos could ring in roughly $35 billion in sales for Foxconn in five years, executives boldly predicted, and the company has already set a lofty target of supplying components or services to 10% of the world's battery-powered vehicles by 2027. Yesterday's new models, including an electric bus, are expected to hit the market in Taiwan as early as 2022.

To reach those goals, Liu is building regional manufacturing hubs. Earlier this month, Foxconn said it would buy a former General Motors factory in the United States from electric-vehicle startup Lordstown Motors for $230 million. That follows plans to build another manufacturing facility in Thailand as well as a chipmaking plant in Taiwan. The aim is to be able to service auto customers and partners, which already include U.S.-based Fisker and China's Geely, closer to their end users. Foxconn still has a long way to go, but it’s a promising start so far.

 

CONTEXT NEWS

- Taiwan's Hon Hai Precision Industry, also known as Foxconn, on Oct. 18 unveiled three electric-vehicle prototypes. The cars were manufactured by Foxtron, the company's joint venture with Taiwanese carmaker Yulon Motor.

- Foxtron Vice Chairman Tso Chi-sen said he hoped EVs would be worth T$1 trillion ($35.7 billion) to Foxconn in five years, according to Reuters.

- Foxconn, which is the world's biggest electronics contract manufacturer, wants to provide components or services for 10% of the world's EVs by 2027.

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

(Editing by Antony Currie and Katrina Hamlin) ((For previous columns by the author, Reuters customers can click on MAK/ SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS https://bit.ly/BVsubscribe | robyn.mak@thomsonreuters.com; Reuters Messaging: robyn.mak.thomsonreuters.com@reuters.net))