The SEC closed its investigation into Fisker https://t.co/9SYVj8c3PC ...

Core Viewpoint - Foxconn's parent company, Hon Hai, is making significant strides in the automotive sector by establishing a joint venture with Mitsubishi Fuso Truck and Bus Corporation to produce electric buses in Japan, aiming to strengthen its foothold in the Japanese automotive market and accelerate the adoption of electric vehicles [4][6][11]. Group 1: Joint Venture and Production Plans - Hon Hai and Mitsubishi Fuso will each invest 50% to create a bus joint venture, set to launch in the second half of 2026, with its headquarters in Kawasaki [4]. - The joint venture will focus on manufacturing Hon Hai's pure electric buses while also handling the development and production of existing diesel buses [6]. - The goal is to secure orders for the Hon Hai EV bus Model T by 2027 and expand to other product lines like the EV microbus Model U [6]. Group 2: Market Context and Challenges - The Japanese automotive industry is facing challenges such as declining competitiveness and a need for restructuring, with foreign investment becoming a key driver of this change [9][11]. - The traditional "Made in Japan, exported globally" model is becoming unsustainable due to rising tariffs and protectionism, leading to an urgent need for localized production [11]. - The Japanese electric vehicle (EV) market is lagging, with EV buses currently accounting for less than 1% of the total bus market, presenting a significant growth opportunity [21][26]. Group 3: Strategic Importance of the Joint Venture - The partnership with Mitsubishi Fuso is seen as a critical step for Hon Hai to establish a local production base in Japan, which is essential for future expansion and collaboration with Japanese automakers [11][20]. - The joint venture is expected to help absorb some of the production capacity needs in Japan, which is crucial for maintaining local employment and manufacturing capabilities [24]. - The Japanese Bus Association has set a target to introduce 10,000 EV buses by 2030, indicating substantial market potential for Hon Hai's offerings [26].

Core Viewpoint - Foxconn has strategically shifted its focus from electric vehicle manufacturing to AI computing infrastructure services, indicating a significant change in its business direction [2][6]. Group 1: Shift from Vehicle Manufacturing - Foxconn, which previously aimed to manufacture electric vehicles, has now abandoned this goal after facing significant challenges in the automotive sector [3][4]. - The company had set a target to capture 5% of the global electric vehicle market by 2025 but has struggled to find stable clients and has faced rising costs in its operations [3][4]. - The complexities of automotive manufacturing, including the need for customization and long product cycles, have made it difficult for Foxconn to replicate its success from the smartphone industry in the electric vehicle market [4]. Group 2: Focus on AI Computing - The AI computing sector is experiencing rapid growth, driven by the demand for large models and significant investments from major tech companies [5][6]. - Foxconn has announced a full commitment to AI computing infrastructure, including partnerships with OpenAI and NVIDIA to enhance its capabilities in AI hardware manufacturing [6][7]. - The company plans to allocate over half of its capital expenditures to AI over the next three to five years, reflecting its strategic pivot towards this area [6]. Group 3: Integration with Automotive Industry - Despite moving away from direct vehicle manufacturing, Foxconn's AI technologies are increasingly integrated into the automotive industry, providing essential computing power for autonomous driving algorithms [7][8]. - The establishment of AI supercomputing centers by Foxconn supports the automotive sector's need for advanced data processing capabilities, which are crucial for smart vehicle operations [8][9]. - Foxconn's role has evolved from being a peripheral player in automotive manufacturing to becoming a foundational technology supporter, enhancing the industry's shift towards automation and intelligence [9].

Core Viewpoint - Foxconn is shifting its focus from electric vehicle manufacturing to AI infrastructure, recognizing the challenges in the EV market and the growth potential in AI hardware and services [15][25][40]. Group 1: AI Infrastructure Investments - Foxconn's chairman Liu Yangwei announced a partnership with OpenAI to design and manufacture AI hardware in the U.S., emphasizing the need for new architectures in AI data centers [7][9]. - The company is building a $1.4 billion AI supercomputing center in Taiwan, expected to be operational by mid-2026, utilizing NVIDIA's latest GPU technology [9][15]. - Foxconn's AI business has surpassed its traditional consumer electronics revenue for two consecutive quarters, marking a significant shift in its growth engine [15][27]. Group 2: Challenges in the Electric Vehicle Market - Foxconn has faced difficulties in the EV sector, including unstable customer relationships and low industry profitability, leading to a reassessment of its strategy [16][19][21]. - The company initially aimed to capture 5% of the global EV market by 2025 but has struggled with production and commercialization [16][20]. - The competitive landscape in China's EV market is fragmented, with many players and ongoing price wars, complicating Foxconn's efforts to replicate its smartphone success [21][22][29]. Group 3: Strategic Shift and Future Outlook - Liu Yangwei believes the upcoming consolidation in the EV market will create opportunities for Foxconn to adopt a contract manufacturing model similar to the PC industry [23][29]. - The company is positioning itself as a key player in the AI infrastructure space, which aligns with its core competencies and offers a more stable growth path [34][40]. - Foxconn aims to become the "TSMC of the EV industry," focusing on efficient, standardized manufacturing and supply chain management rather than brand competition [39][40].

EV Market Analysis - The EV sector initially saw many companies aiming to become the next Tesla, but scaling production at a reasonable cost proved challenging [1][2] - Several EV companies like Fisker, Faraday Future, and Canoo faced financial difficulties and went bankrupt around 2024 [1][2] - Tesla's decision to open up its charging stations to other EVs is significantly beneficial compared to companies like ChargePoint [2] - Consumers have expressed frustration with the charging experience at non-Tesla charging stations [2] Consumer Credit and Economic Conditions - 60% of the population is living paycheck to paycheck, relying on "buy now pay later" services to manage expenses [4] - 25% of consumers using "buy now pay later" services are using it to purchase groceries, indicating an unhealthy economic situation [4] - Stimulus checks during the COVID-19 pandemic distorted the understanding of prime and subprime credit scores [5] - Auto loan originations spiked post-pandemic, leading to increased consumer delinquencies, charge-offs, and repossessions [5][6] - Despite rising delinquencies and repossessions in asset-backed securities for auto loans, companies are not yet increasing their provision for credit losses (PCL) [6]

Core Viewpoint - The conflict between the Trump administration and California over electric vehicle development and environmental policies has intensified, with California taking a strong stance against federal rollbacks in clean energy initiatives [2][3]. Group 1: Federal Policy Changes - The Trump administration has enacted policies that undermine California's environmental regulations, including revoking its special waiver to set stricter vehicle emissions standards and halting the 2035 ban on gasoline vehicles [3][4]. - The federal electric vehicle tax credit, which provided up to $7,500 for new cars and $4,000 for used cars, is set to expire on September 30, 2023, significantly impacting electric vehicle sales [4][6]. Group 2: California's Response - California's Air Resources Board (CARB) and other agencies have released a report outlining strategies to fill the federal subsidy gap, enhance infrastructure, and establish new vehicle emission standards to promote zero-emission vehicles [2][5]. - Governor Gavin Newsom has characterized the federal actions as an "all-out attack" on California's clean air initiatives and has initiated legal action to maintain the state's zero-emission vehicle policies [5][4]. Group 3: Market Impact and Sales Trends - In July 2023, U.S. electric vehicle sales reached approximately 130,000 units, a 20% year-over-year increase, with the average transaction price for new electric vehicles at $55,689, down 2.2% from June [6]. - The impending expiration of the federal tax credit is expected to drive a surge in electric vehicle purchases in the third quarter, potentially leading to record sales before the subsidy ends [6]. Group 4: Infrastructure and Future Plans - California plans to invest billions in building charging and hydrogen refueling infrastructure, particularly in underserved areas, to facilitate the adoption of zero-emission vehicles [7]. - CARB has initiated the process for new vehicle emission standards, aiming to create a state-controlled regulatory framework independent of federal guidelines [7][8].

Here is a timeline of the events that led fledgling automaker Fisker to file for bankruptcy. https://t.co/pxzQ1LjeBF ...

Henrik Fisker, the founder of failed EV startup Fisker Inc., and his wife Geeta quietly wound down a private charitable foundation established in late https://t.co/d4NkNZDv1D ...

Core Insights - Foxconn's ambitious electric vehicle manufacturing dream has faced significant setbacks in the U.S. market, culminating in the sale of its Ohio factory for $375 million, which it had acquired for $230 million two years prior [2][3][4] Group 1: Company Actions and Decisions - The sale of the Ohio factory is framed as a strategic shift towards AI and data, but it highlights the challenges Foxconn has faced in the automotive sector [2][3] - The factory, once seen as a key asset for Foxconn's entry into electric vehicle manufacturing, has been described as an "electric vehicle graveyard" due to its underperformance [6][8] - The sale agreement includes a leaseback clause, allowing Foxconn to retain operational control while alleviating the financial burden of heavy capital investment [3][4] Group 2: Market Context and Challenges - The U.S. electric vehicle market is highly competitive, with established players like Tesla and traditional automakers accelerating their electric transitions, creating immense pressure on new entrants [6][9] - Regulatory complexities and varying state policies in the U.S. add to the operational challenges, increasing compliance costs for new manufacturers [6][9] - Foxconn's reliance on external partners for technology and its lack of core vehicle development capabilities have hindered its ability to adapt to the automotive industry's unique demands [8][9] Group 3: Lessons and Industry Implications - The experience of Foxconn serves as a cautionary tale for other companies considering entry into the automotive sector without a deep understanding of its complexities [9] - Industry experts emphasize the need for a return to fundamental manufacturing principles, moving away from speculative approaches to ensure sustainable growth [9]

Core Insights - Foxconn has sold the former GM factory after failing to establish significant electric vehicle production, marking a second major setback in its efforts to revive U.S. manufacturing [1] - The factory and land were sold for approximately $88 million, with machinery and equipment from its EV subsidiaries sold for around $287 million [2] Group 1: Factory Sale and Financials - The buyer of the factory is Crescent Dune LLC, a newly created entity in Delaware [2] - Foxconn initially purchased the factory for $230 million in 2021, intending to make it a key electric vehicle manufacturing hub in North America [4] - The total sale price for the factory and equipment amounts to $375 million [2] Group 2: Manufacturing Plans and Challenges - Despite the sale, Foxconn claims it will continue to manufacture products for customers at the Lordstown facility and remains committed to the automotive industry [3] - Reports indicate that Foxconn plans to shift focus to building AI servers at the factory [3] - Foxconn faced significant challenges with multiple electric vehicle companies it partnered with, all of which went bankrupt, including Lordstown Motors and IndiEV [4][7] Group 3: Bankruptcy Issues - Lordstown Motors filed for bankruptcy in June 2023, accusing Foxconn of financial mismanagement [7] - IndiEV also filed for bankruptcy in October 2023, with minimal funds remaining [7] - Fisker Inc, another company Foxconn was supposed to build EVs for, filed for bankruptcy in June 2024 [7]