Interestingly, the story repeated the reason that makes the carmakers hesitate to work with Apple:
Talks faltered after the US company asked that Nissan make Apple-branded cars, a demand that would effectively downgrade the automaker to a hardware supplier. Many carmakers have expressed a fear of becoming “the Foxconn of the auto industry,” a reference to the Taiwanese manufacturing group that assembles iPhones.
…and it’s been clearly said on the title: to avoid becoming Foxconn of cars.
A local report (in Chinese) further quoted an analyst to speculate that Volkswagen from Germany could be a candidate on Apple’s shortlist.
Why not “another Foxconn”?
There are a few interesting perspectives to see it:
Is becoming another Foxconn so miserable nobody wants to be? Isn’t Foxconn already one of the most valuable companies in Asia?
Will Apple scrap the project if nobody wants to make cars for it?
Is it possible that these carmakers all have their own electric vehicle (EV) projects in progress, and they don’t want to share the results with Apple?
What expertise, technology and advantage does Apple already have but require a manufacturing partner to complement? What does Apple not have?
As long as Foxconn is already having an EV joint venture with Yulong, a Taiwanese carmaker, will it be “another Foxconn”?
These are simple thoughts but can be expanded into broad discussions. So I’ll just leave them to the readers for now.
Is “Foxconn manufacturing” right for EV?
Foxconn for Apple Cars or not, this mega company has surely made tons of money by iPhone OEM, but it’s been backed by millions of Chinese workers and 3–4% gross margins. And, by the way, Foxconn has not been very good at marketing in end-user markets as Hyundai or Nissan.
Since roadworthy EVs must abide by more quality and safety regulations, and they are mechanically far more complex than iPhones, the successful process, profitability and supply chain management models from today’s Foxconn may not fit the EV lines.
Any brand, EV or anything else, could benefit from associating with Apple, but they must also take the impact from the association on their brand and core values into consideration. It could be part of the reasons the established brands hesitate to take the dive.
Will there be Foxconn-ish, less-known OEM manufacturers which offers white-label EV platforms to large tech companies or even high-profile car makes, so the latter could add their own systems and components for more diverse automobiles?
Quite possible. And the first batch of such white-labels would most come from China thanks to its labor force, supply chains, market size and even environmental regulations.
In the long term, with the hurdles of EV assembly lowered and common components abundant, many countries without previous auto industry experience, such as Vietnam or Kenya as imagined by Philippe Chain in “EVs: The Manufacturing Revolution”, could join the EV platform powerhouses in a decade.
If some Southeast Asia or African countries without car experience could make EVs in the future, there’s no reason Foxconn, the resourceful, money-rich industrial mogul, could not take its chance trying to make some viable EV platforms.
But still, Foxconn still need to think like Hyundai and Nissan did: does EV OEM meet the need for its future growth, development of its core competence and overall profitability? Fortunately it doesn’t have branding dilemma like Hyundai or Nissan though.
The last word
As far as I know about Apple product development, Volkswagen may not be the partner of choice for Apple Cars. Volkswagen has a powerful brand, historically not an OEM partner and yet to become a EV market leader (though they make good EV “concept cars” like ID.4). In short, VW is in the same situation like its Korean and Japanese counterparts and not a perfect complement to Apple either.
However, if Apple had their own mechanical engineering and EV system integration expertise ready, it might not need a mature EV partner and the choices will become wide open. For example, Skoda in the VAG Group (VW’s parent company) could be another candidate worth consideration.
The last possibility is that Apple does it all own its own — the search for another Foxconn is just a disguise, or actually a pure assembler who happily takes the 3% margin is the only thing they’d need.
If that’s the case, time will be the only issue. The longer Apple Cars take before its debut, the more possible Apple will work out the miracles singlehandedly.