Electric Vehicles

Foxconn, the world’s largest contract assembler of consumer electronics, has begun discussions with Vingroup, the largest conglomerate in Vietnam, about working together in the fast-growing field of electric vehicles.

A spokesman for Hanoi-based Vingroup confirmed that the company had “received proposals” from Foxconn but said that “nothing is concrete yet.” Any partnership would focus on developing electric vehicle batteries and other parts, he adds. “No decision on working together to produce EVs has been made yet,” he says.

Reuters reported on Friday that Foxconn has proposed acquiring EV production lines owned by Vingroup’s automotive unit, VinFast. VinFast prefers a partnership that would help brand itself as an eco-friendly automaker and wants to retain its EV business, according to the Reuters report.

“Foxconn views electric vehicles as a promising new growth driver for the company,” says Chris Robinson, a senior analyst with Lux Research. “It has developed a platform of technologies upon which other companies can build cars around. Use of an existing platform would allow VinFast to reach the market faster and spend less time and money on designing a powertrain,” he says.

A deal would make each billionaire-run company more competitive in a fast-growing, competitive sector. The global electric vehicle market stood at an estimated $140 billion in 2019 and should reach $700 billion by 2026, research firm Facts & Factors says in a report released in January.

Both companies have already worked on EVs. Foxconn signed a memorandum of understanding last month with Los Angeles-based EV startup Fisker Inc. to sell as many as 250,000 vehicles in China, Europe, India and North America. Foxconn had agreed before to build electric cars with Fiat Chrysler and Geely, among other carmakers. The company will be able to use existing assembly technology to compete.

Billionaire Terry Gou founded Foxconn, also known as Hon Hai Precision, 47 years ago and the company now sees $172.8 billion in annual sales. The company best known as an Apple contractor has tried over the past decade to diversify product lines. Foxconn has set a goal of taking 10% of the global EV market between 2025 and 2027. Foxconn did not respond to a request for comment.

Vingroup car-making unit VinFast will introduce its own electric, self-driving sport-utility vehicles this year with Tesla-like features at a lower price, the deputy CEO said in January. The parent company led by Vietnam’s richest person, Pham Nhat Vuong, had debuted electric scooters two years ago in the home market. Other Vingroup units develop housing, build resorts and make smartphones. Annual sales come to $5.6 billion.

The conglomerate calls EVs “part of VinFast’s predetermined roadmap since joining the auto market three years ago.” They will increase VinFast’s popularity and help control emissions, the company says.

Foxconn and Vingroup aren’t total strangers either. The two leveraged manufacturing capacity last year to work with New York-listed ventilator developer Medtronic on making ventilators that help keep Covid-19 patients alive.

City leaders agree that electric vehicles are the future of Spokane’s fleet, but have been at odds over how quickly to get there.

Spokane City Council President Breean Beggs introduced a new law on Monday that would require the city to, whenever practicable, buy electric when adding a new vehicle to its fleet.

The proposal, which largely mirrors requirements that already exist under state law, comes after Beggs implored city officials to purchase electric vehicles instead of hybrid or gasoline powered models on two separate occasions in recent months.

In both cases, city administrators warned the city does not yet have the charging infrastructure to go all-in on electric vehicles. Beggs and fellow council members have advocated for buying electric vehicles to incentivize the installation of chargers and save money in the long run.

The new law would require the city administration to notify the council’s Public Infrastructure and Environmental Sustainability Committee when it plans to purchase a nonelectric vehicle and explain why an electric vehicle is not the right choice.

The law acknowledges that it’s not always possible to purchase an electric vehicle – think of a snow plow, for example. But Beggs has argued it’s often cheaper, over the life of a vehicle, to go electric.

City Council members argue that the city is likely failing to comply with a state law, adopted in 2007, that requires cities to begin purchasing electric or biofuel vehicles when replacing old ones “to the extent practicable” by 2018.

“This would just comply with state law … and basically say that if there’s a comparable electric vehicle on lifetime costs, we should be doing that,” Beggs said of his proposal during a Public Infrastructure and Environmental Sustainability Committee meeting on Monday.

City officials have said it’s unclear whether, under the state law, the cost of installing car charging infrastructure should be included in the life cycle cost calculations for each car. Beggs’ city law provides an answer, stating “the cost of installing electric charging infrastructure shall not be considered as a cost related to procuring any specific vehicle.”

A 2018 report by Coltura, an environmental organization that advocates for transitioning away from gasoline-powered vehicles, inventoried 1,086 vehicles in the city of Spokane’s fleet. Only one was electric.

For comparison, Tacoma had seven electric vehicles and Seattle had 178, but Spokane was not the only city called out for failing to comply with state law in the Coltura report.

Beggs said Monday he and the city’s Chief Financial Officer, Tonya Wallace, agree there is a need for better data about the city’s fleet. The city is expected in the coming weeks to appoint a new fleet services director, whom Beggs hopes can help lead that effort.

The new law would also reiterate the council’s previously approved target of 100% electric or biofuel-powered vehicles by 2030.

Earlier this month, the council put the brakes on a city plan to purchase more than a dozen hybrid SUVs for the city’s code, building, and parking enforcement officers.

Council members preferred to hold off on the purchase until city leaders had a chance to meet with officials from Avista. The utility company has committed $2.5 million to match a grant awarded to the Spokane Regional Transportation Council.

Last December, the City Council insisted city officials pilot the use of four Tesla Model Y SUVs for the Spokane Police Department instead of two hybrids and two conventional gasoline vehicles.

Beggs has floated a proposal to encourage the purchase of electric vehicles since 2019. He said “I think we’ve considered this a while, but it’s a new council.”

(Repeats story for additional subscribers)

* Potential 4-7% cashbacks on sales and exports for auto companies

* Additional 2% for EV manufacturers and suppliers

* Scheme expected to attract $14 bln of investment

By Aditi Shah

NEW DELHI, March 22 (Reuters) – India plans to offer fresh incentives to companies making electric vehicles (EVs) as part of a broad auto sector scheme it expects to attract $14 billion of investment over five years, according to industry sources and a document seen by Reuters.

The country’s efforts to promote EVs to reduce its oil dependence and cut pollution have been stymied so far by a lack of investment and weak demand, as well as the patchwork nature of existing incentives that vary from state to state.

The new automotive sector scheme, however, has been under discussion since mid-2020 to provide a more focused approach, industry sources close to the matter told Reuters. The plans envisage $8 billion of incentives for carmakers and suppliers over a five-year period to drive large investment in the sector.

Final details of the scheme are expected within a month, but companies will be able to apply for incentives from April 1, the sources said.

Companies will receive 4-7% government cashbacks on the eligible sale and export value of vehicles and components, but for EVs and their components there is an additional 2% as a “growth incentive” to promote electric mobility, according to the draft policy document seen by Reuters.

Elon Musk’s Tesla Inc is already gearing up to enter India while rivals including Ford, Volkswagen and India’s Tata Motors and Mahindra & Mahindra also have plans to invest billions of dollars in EVs to meet stricter global emissions regulations.

Automotive component manufacturers in India must be ready to pivot their product offerings to cater for the shift towards EVs, the document said.

MADE IN INDIA

The automotive incentive scheme is part of India’s broader $27 billion programme to attract manufacturers from the likes of China and Vietnam to capture a bigger share of the global supply chain and exports.

Story continues

But for new companies entering India, as well as existing automakers, challenges abound.

Steep interest rates and power tariffs, as well as poor infrastructure and high logistics costs, make it costlier for companies to operate in India compared with rivals such as Thailand or Vietnam.

“The (new) scheme proposes financial incentives to help overcome these disabilities and make India more competitive,” the draft policy document said, referring to inefficiencies that it said can lead to 5-8% higher costs for manufacturers in India.

The government expects the scheme to bring additional investment of $14 billion, create 5.8 million new jobs and rake in more than $4 billion in total tax revenue over five years.

To benefit from the scheme automakers must meet conditions including minimum global revenue of $1.4 billion. For auto parts makers it is $69 million. The companies must grow by at least 8% each year to qualify for the incentives, which are also linked to the distance between the factory and point of sale.

The document added that existing programmes focus on a large number of companies that lack scale and “are constrained in their ability to invest and undertake the risk required for rapid growth”.

“A change in strategy is needed to focus on promoting firms that have the scale, competitive ability and management capabilities to be automotive champions,” it said.

(Reporting by Aditi Shah; Editing by David Goodman)

Photographer: David Paul Morris/Bloomberg

Stay on top of the electric car revolution by signing up to our Hyperdrive newsletter here.

Good morning, and welcome to the first edition of the Hyperdrive newsletter, our look at the revolution that’s reshaping the global auto industry. Each day of the week, we’ll report from a different part of the world to bring you our insights on everything from EVs to batteries, self-driving cars to flying taxis.

I’ve been covering the transition to electric vehicles for a decade from San Francisco, and it finally feels like it’s really happening.

California — where freeways are ubiquitous, car culture is legendary and asthma rates are abysmal — has long led the nation when it comes to supporting electric vehicles. The state still offers clean vehicle rebates on cars and there’s a ZEV — or Zero Emission Vehicle — mandate for manufacturers. The climate crisis and our horrific wildfire season is accelerating the urgency of the transition: In September, Governor Gavin Newsom announced that the state is banning the sale of new gas-powered cars starting in 2035.

Silicon Valley also has led the way on many of the advances in robotics and computing. After the Darpa Urban challenge in 2007, autonomous vehicle development began in earnest with Google’s self-driving car project, which spun into Waymo. While it once stood alone, today dozens of companies have state permits to conduct testing with drivers, and six companies have advanced to driverless testing permits. Uber and Lyft are both headquartered in San Francisco, where the question over whether their drivers are employees or contractors has been hardest-fought here. The region is abuzz with rumors about what exactly Apple is, or isn’t, doing when it comes to making its own autonomous car. Electric vehicle companies based in China, like Nio and XPeng, have Silicon Valley outposts. Promising startups like Aurora and Rivian have raised millions of dollars — Amazon is funding both — while Canoo, Lucid and Faraday Future have done deals to go public via SPACs. Tesla, which nearly went bankrupt during the struggle to launch the Model 3 in 2018, delivered nearly half a million cars in 2020 and is building two new factories in Austin and Berlin. 

Two newcomers to the electric-vehicle market, Nidec Corp. and Foxconn Technology Group’s automobile arm, unveiled an agreement on supplying electric powertrains — the collection of components including the motor, gears and drive shaft that propel a vehicle.

Nidec and Foxtron Vehicle Technologies have signed a memorandum of cooperation and will demonstrate the initial results of their collaboration in the fourth quarter, Foxtron said in a statement Thursday.

Foxtron was established last year as a venture between Taiwan’s Yulon Group and Foxconn, the world’s largest assembler of iPhones. As Apple Inc.’s electric, autonomous car project gains momentum, Foxconn, seen as a top contender for the Apple car business, has been bulking up its own automotive capabilities. Nidec, based in Kyoto, is shifting its business of making motors to supply EV manufacturers, using its years of experience making small precision motors for hard-disk drives, consumer appliances and industrial machines.

In October, Foxconn unveiled an open and customizable EV software and hardware platform called MIH. The company is inviting others to contribute hardware, software and components to the platform. The first EVs built using the platform will be unveiled by the end of this year, the Taiwanese manufacturer has promised.

Hardware for the MIH platform is already being provided by Foxtron. Bringing together Foxtron’s vehicle development capabilities and Nidec’s experience with electric powertrains will “strengthen the performance and development of the MIH open platform,” Foxconn said. They added that they’ll seek to increase the competitiveness and development efficiency of their products.

Nidec, a key supplier in the electric-motor industry, is pushing deeper into the global auto market, adding names to the roster of automakers buying its motors. That list already includes China’s Guangzhou Automobile Group Co. and France’s Peugeot SA.

The motor maker is betting that its playbook of becoming a supplier of 85% of the world’s hard-disk drives — high-quality, precise, affordable motors — can be used to make it the world’s top supplier of EV motors. The company has pledged to spend close to $10 billion over the next five years to grab a market share of 40% to 45%.

Foxtron is working on both passenger and commercial vehicles, the Taiwanese company said, adding that it will reveal further details at a meeting of the MIH alliance held next week.

Contact editor Marcus Ryder (marcusryder@caixin.com)

Related: China Mulls Giving Green Light to Highway Self-Driving Car Tests

With electric vehicle production ramping up among major automakers, the US government has increasingly been looking to Canada for the extraction and production of precious minerals.

According to Reuters, the US Department of Commerce recently held a closed-doors meeting with a number of metals miners and battery manufacturers to discuss how to increase Canada’s EV material production. A source who had attended the meeting revealed to Reuters that department officials are looking to swiftly create a Canada/US EV supply chain, as well as increase regional mineral production in order to offset competition from Chinese manufacturers.

The latest talks come amid a growing demand for zero-emission transportation, which is expected to surge over the next ten years. A number of environmental groups have protested against several major mining projects in the US, which in turn has prompted government officials to look to Canada for its supply of minerals. Among the attendees were Tesla Inc, Talon Metals Corp, and Livent Corp, which provided input on ways Washington can aid in the expansion of US companies into Canada.

The event follows last month’s talks between US President Joe Biden and Canadian Prime Minister Justin Trudeau, where both leaders agreed to create a strong EV supply chain between the two neighbouring countries. Since Biden become president, three US mining companies have thus far invested in Canada, where mining contributes to 5% of the country’s GDP, as compared to only 0.9% in the US.

Moreover, lithium-ion batteries, which are used to power electric vehicles, are difficult and dangerous to transport over vast distances, prompting automakers to source them closer to their assembly plants. As a result, Ontario and Quebec are both ideally positioned to build battery cell plants and take advantage of US automakers that are located in Ohio and Michigan.

Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.