They outlined the path to the launch of affordable electric cars – Labor

They use the practice from mobile phones

Outsourcing allows a company to manufacture without factories, suppliers and blueprints

They invest 600 million dollars a year

According to Jack Chen, any company can produce cars even if there are no suppliers, factories or blueprints. A business could do this through outsourcing, the same business model that was widely adopted in the consumer electronics sector. Companies such as Sony and Apple realized the advantages of this method decades ago, writes the Wall Street Journal.

With this method, it’s easier to outsource production of products like the PlayStation and the iPhone to subcontractors like Taiwan’s Foxconn Technology Group. Jack Chen runs a Foxconn subsidiary that could take a similar approach with electric vehicles and cut costs. The goal is to significantly reduce the gap between electric cars in the US, where some expensive models are gathering dust at dealerships, and in China, where electric cars have taken a large share of the market and their average price is half that of the US market.

Many in the industry question whether automakers will be interested in this business model, as they are used to creating their own designs and assembling the vehicles themselves. Auto companies including General Motors, Volkswagen and Toyota are building EV platforms that they say give them an edge over the competition. Toyota, for example, is working on projects to give its future electric cars roomier cabins and longer ranges.

For now, Chen is focusing on Asia, where the excitement around the new approach is already being felt. He used it himself when he co-founded Chinese electric car startup Nio Inc., which designs its vehicles but works with another Chinese manufacturer to assemble them.

Taiwan-born Chen, 64, brings automotive outsourcing experience, including at Ford Motor’s China business and at Fiat.

The Foxconn-led consortium that Chen now leads is called Mobility in Harmony, or MIH. At the Tokyo Motor Show, he showed a three-seater concept car. Chen said MIH is talking to companies interested in its platforms and sees enterprise customers in Southeast Asia as potential customers.

Compared to gasoline and diesel-powered vehicles, EVs require fewer parts and rely more on software. MIH will offer customers a standardized package of EV parts and software that they can customize.

Chen said his door is open if Apple comes knocking with an electric car plan. “It’s like telephones,” he says. Foxconn has become the largest consumer electronics subcontractor in the world, with centers such as the so-called iPhone City in central China, which has a daily capacity of hundreds of thousands of devices.

Although Foxconn is doing business with U.S. automakers, most of its automotive footprint is in Asia, where it already supplies parts to Tesla. In recent years, the company has built up a network of auto and parts manufacturing facilities in Southeast Asia, including a $200 million investment in Vietnam. Foxconn is building an assembly plant in Thailand through a joint venture with a Thai company. Foxconn executives announced that they are investing up to about $600 million a year in new initiatives led by the electrification of transportation.
Foxconn is also focusing on India, where it plans to start electric vehicle component projects next year.

Spread Chen The MIH consortium, which consists of more than 2,000 companies, including auto parts and software suppliers, aims to provide components for half of all electric cars in the next three to five years. That would be a step toward Foxconn’s broader goal of producing nearly half of the world’s electric cars.

But the company has a long way to go. MIH is just starting to close deals with customers, while Foxconn’s manufacturing business is only building a few electric models at the moment.