Foxconn Photo: VCG

Foxconn, the world's largest electronic products manufacturer and Apple' supplier, has set up a new-energy vehicle (NEV) company in Central China's Henan Province. Analysts said the move reflects China's intensifying green drive and the electronics trend of the global automotive industry.

Foxconn may be able to rely on its advantages in original equipment manufacturing to set foot in the crowded NEV sector.

With registered capital of 500 million yuan ($70 million), the new company's activities cover the research and manufacturing of auto components, NEV sales and wholesale business of auto components, according to domestic enterprise information portal Qichacha.com.

Foxconn, formally known as Hon Hai Precision Industry Co, told the Global Times on Wednesday that the company set up a new global business headquarters in Zhengzhou, capital of Henan in 2023 to cover new businesses, including NEVs and batteries. The establishment of the NEV company in Henan will boost the implementation of related projects.

Foxconn's moves in the NEV sector indicate the rising role of electronics in the vehicle industry as well as more green driving globally, Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Wednesday.

Foxconn faces many challenges in order to set foot in the crowded market, as the NEV sector is developing fast and it will be difficult for the company to make near-term technological breakthroughs due to its lack of a research and development foundation, Cui said.

Wu Shuocheng, a veteran automobile analyst, told the Global Times on Wednesday that it's no surprise that Foxconn entered the NEV field, as the smart and electrification trends of the auto industry are attracting more newcomers such as Xiaomi.

Moreover, it is wise for Foxconn to base its NEV production in Zhengzhou, a city that has a sound automotive manufacturing sector, Wu said.

Foxconn can rely on its advantages in original equipment manufacturing, echoed Cui.

Foxconn has been stepping up investment in the booming NEV sector in recent years. At Hon Hai Tech Day 2023 in October, Foxconn signaled plans for the mass production of a sporty and intelligent crossover - the MODEL B - and provided an update on the commercial production of its first family sport utility vehicle, called MODEL C.

According to a circular released by local government agencies in Henan, Foxconn Zhoukou Science and Technology Industrial Park, the technological upgrade of 5G smartphone precision parts at Foxconn Lankao Technology Park and production capacity expansion at Fulian Technology (Jiyuan) Co are among the province's first group of key projects in 2024.

China's NEV manufacturers wrapped up 2023 with a better-than-expected performance, with sales estimated to have surged 38 percent to 8.88 million units, according to data released by the China Passenger Car Association.

Among the many NEV producers that have seen booming sales, Shenzhen-based BYD became the world's leading seller of pure electric vehicles in the fourth quarter of 2023. The auto company announced sales of 526,409 all-electric cars between October and December, surpassing Tesla.