Foxconn invests $811m to develop a cheap electric car
Manufacturing giant Foxconn, famed for its partnership with Apple, has announced it will be investing $811 million to develop an electric car that will retail at just $15,000.
Foxconn will be using the investment to develop a new electric vehicle manufacturing facility in China’s Shanxi province. The company already has two factories in Shanxi - one is used to assemble smartphones and the other is dedicated to building its army of robots and automation equipment.
The company’s aim is to make an electric vehicle which retails at less than $15,000, says CEO Terry Gou. According to reports, production is already underway.
The Taiwanese company has some experience in the automotive industry. It already manufactures a 25.6-kilowatt-hour lithium-ion battery pack for the BAIC E150 EV, a Chinese electric car that starts at around $20,300, according to The Green Optimistic. In the past, the company has also worked with electric-car maker Tesla to develop its touchscreen panels. It also played a part in developing Tesla car batteries.
Foxconn isn't discussing anything else about its electric-car production strategies, but it may be planning to take advantage of strong Chinese government support for electric cars and a potentially untapped market. The country's central government has been trying to encourage the adoption of low-emission “new energy vehicles” - including battery-electric, plug-in hybrid, and hydrogen fuel-cell cars - for some time, and many large car-makers, including BMW and Tesla see China as a major market for electric-vehicle adoption.
As it stands, there is no timeframe outlines for the launch of the new electric vehicles.
IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.