Apple’s car project may be forever in limbo, but Foxconn, the company that manufactures the iPhone, has just made another step into the auto industry. All that and more in the The Morning Shift for February 24, 2021.
1st Gear: This Might Be The Future Of The Car Industry
Fisker long maintained that contract production was the way forward for the auto industry. That is, a small startup car company could pay a large but low-cost manufacturer to build cars that the little guy has money only to design, not produce. Fisker eventually had a hard time with this plan, perhaps because its contract production partner was in Finland.
Now Fisker is tying up with Foxconn in Taiwan, a bit more of a global manufacturing hub, if not yet for cars. Bloomberg lays out the details of the deal:
Foxconn Technology Group will develop an electric vehicle with Fisker Inc., part of the manufacturer’s efforts to boost its automotive capabilities at a time when technology companies including its main customer Apple Inc. are looking to expand in vehicles.
The car will be built by Foxconn, targeted at multiple markets including North America, Europe, China and India, and sold under the Fisker brand, according to a joint statement from the companies Wednesday. Production is set to start in the fourth quarter of 2023.
Taiwan’s Foxconn, whose main listed arm is Hon Hai Precision Industry Co., in October introduced its first-ever EV chassis and a software platform aimed at helping automakers bring models to the market faster. This month, Hon Hai Chairman Young Liu said two light vehicles based on the Foxconn platform will be unveiled in the fourth quarter. Foxconn is also planning to help launch an electric bus around the same time.
Dewalt 20V Max Cordless Drill & Driver Kit
Comes equipped with an LED which goes on when the trigger is pulled. You’ll a clear view of whatever you are drilling or screwing with minimal shadows.
Knowing that Fisker is involved makes me think this will go nowhere. Knowing that Foxconn is involved makes me think this will go right to the top.
2nd Gear: Hyundai $900 Million Battery Recall
LG just won a somewhat confusing victory over rival battery maker SK, alleging that the latter stole the former’s battery tech. LG succeeded in getting the Feds to dish out a delayed ban on SK batteries here in the States. And just in time for that win to fade out of the news cycle, LG is in there again, this time with a huge and costly recall over Hyundai Kona EVs catching on fire.
What’s funny is that though these are LG batteries, it’s Hyundai footing the bill for the recall, as Reuters reports:
Hyundai will replace battery systems in 82,000 electric vehicles globally due to fire risks — a costly $900 million recall that lays bare the thorny issue of how car and battery makers split the bill when problems arise.
LG Energy Solution, a division of LG Chem which manufactures the batteries, was quick to deflect criticism.
It said in a statement that Hyundai misapplied LG’s suggestions for fast-charging logic in the battery management system, adding the battery cell should not be seen as the direct cause of the fire risks.
South Korea’s transport ministry said in a statement that some defects had been found in some battery cells produced at LG Energy’s China factory. Hyundai did not comment on the cause of the fires.
This is all sounding very political, tied in with notions of forwarding national industry. That’s the car business, baby!
3rd Gear: The King Steps Down
Osama Suzuki ruled the car industry as far as I am concerned. I remember him most for straight up rejecting a monumental tie-up with Volkswagen, claiming that there was nothing the monolithic company could offer little Suzuki in the way of new technology. Everyone talked about Suzuki like some cranky old man. Then Dieselgate broke. Cool dude!
Bloomberg gives the details of his retirement:
Suzuki Motor’s 91-year-old chairman, Osamu Suzuki, is stepping down after leading an automaker for longer than anyone else in the industry.
Suzuki, who was the Japanese automaker’s CEO for 22 years and then chairman for another two decades, will step down from his current role following a shareholders meeting in June, the company said in a statement Wednesday. He will remain as a senior adviser.
With almost half a century at the helm, Suzuki is widely credited with turning the automaker into what it is today: one of the largest small-vehicle manufacturers in the world.
I can’t help but root for the little guy in the car world.
4th Gear: Volvo-Geely Merger Is Off
Geely, the largest car company in China that’s not state-run, owns Volvo Cars. Well, that’s half true. Geely Holding Group owns Volvo, but Geely’s distinct car brand, Geely Auto, sits next to Volvo under the larger Geely Holding Group umbrella. Geely Holding Group was going to have Volvo and Geely Auto merge, but apparently that deal is off, as the Financial Times reports:
The two businesses, both owned by the Geely holding company, announced plans to merge in February last year in a move that would have brought the Swedish carmaker back to the public markets.
On Wednesday, Volvo and Geely said they would combine several functions, including joint software development and procurement, while remaining separate.
They will also develop the next electric car architectures, which may also be used by other brands in the Geely family including Britain’s Lotus, Malaysia’s Proton, and Lynk & Co, co-owned by Volvo and Geely.
I’m sure the ramifications of this deal, which will continue to see Volvo and Geely (Auto) collectively owned by Geely (Holding) as well as owning Lynk & Co together, are clear to somebody.
5th Gear: Biden Vows He Will Do Thing Soon
Biden, a guy who owes me a couple of thousand dollars, is adamant that soon, very soon, he will do a thing that will have, he maintains, some affect on this country and industry.
He will have a meeting, and then sign an executive order to launch a review, which will then address supply shortages for semiconductor chips in the auto industry, as Reuters reports:
Administration officials said Biden’s executive order, to be signed later Wednesday afternoon, will launch an immediate 100-day review of supply chains for four critical products: semiconductor chips, large-capacity batteries for electric vehicles, rare earth minerals and pharmaceuticals.
“Make no mistake, we’re not simply planning to order up reports. We are planning to take actions to close gaps as we identify them,” the administration official added.
I look forward to the Biden administration identifying gaps and then planning to take action!
Reverse: Thanks, Larry!
Neutral: Will Car Companies In The Future Just Outsource To Contract Suppliers?
This is how the bicycle industry operates, and I’m not sure if there’s any way the car industry can avoid this kind of structure.