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Foxconn unveiled three electric vehicle models on Monday as it seeks to develop its nascent EV arm into a $35.8bn business in five years and compete with automakers such as Tesla, Volkswagen and General Motors.
The world’s largest contract electronics manufacturer and Apple supplier showcased prototypes of an electrified SUV, luxury passenger car and bus in Taipei today, built with local automaker Yulon Motors.
The announcement is a culmination of plans dating back to 2014, when the founder and then chair Terry Gou gave his blessing to an internal project to build a prototype of a complete electric vehicle, reported in Nikkei Asia last month.
Chair Young Liu said the three models proved Foxconn was “no longer the new kid in town” when it comes to EVs. The Model T bus will be the first to hit the roads in Southern Taiwan next year. Foxconn will sell customised versions of its prototypes to EV brands.
Foxconn is not the only tech company putting wheels on its machines. With profits from consumer electronics declining, smartphone and kitchen appliance makers, including Apple, Huawei, Sony and Xiaomi, have all announced plans to invest in EVs.
Electric vehicles still make up only 1 per cent of the global fleet of passenger cars, but demand is set to rise rapidly, according to Peter Campbell and Joe Miller’s Big Read. Foxconn aims for its designs and components to be in 5 per cent of the world’s EV sales by 2025, then forecast to reach 10.7m vehicles.
The EV revolution has opened the playing field to many new players, including start-ups and established tech companies, which would not have dreamt of making combustion engine vehicles.
For decades the car industry was made up of large companies throwing money at improving internal combustion engine technology, as well as complex power-train systems and transmissions — all of which required high investment and years of research and development. But the manufacturing process behind an EV is far more straightforward, lowering the barrier for newcomers with just enough cash to splurge.
But these firms face an uphill battle persuading investors that they can compete with traditional automakers, with strong customer loyalty, established sales distribution networks and aftersales customer service.
Traditional carmakers have also been pushing technological innovation. Foxconn boasted on Monday that one of its passenger car prototypes hosts facial recognition software to unlock the door — hardly revolutionary considering Hyundai pioneered the use of fingerprint technology to open and start vehicles without using car keys in 2019.
Nevertheless, established automakers will be eyeing Foxconn’s announcement with caution. Semiconductor shortages this year hit carmakers particularly badly, highlighting the competitive advantage Foxconn has in managing a vertically integrated supply chain, which includes automotive chips. Foxconn is securing its supply of EV batteries, which analysts warn could also face supply constraints as the electrification push gathers pace, by acquiring and partnering up with battery start-ups.
The Taiwanese company could find its automotive inexperience balanced out by its decades of experience managing complex supply chains with strong connections in China, while European and US carmakers find their governments at loggerheads with Beijing.
But so far, investors remain unconvinced by Foxconn’s EV plans, the company’s shares closed down 3 per cent on Monday.
The Internet of (Five) Things
1. Australian slot machine developer takes a gamble
Shares in online gambling software company Playtech soared by more than 50 per cent on Monday after the group agreed to a £2.7bn takeover by Australian slot machine developer Aristocrat Leisure. The acquisition will help to increase Aristocrat’s scale in the online sports betting market in the US, where Playtech has recently expanded after states, including New Jersey, relaxed rules allowing online gambling and sports betting to take place.
2. UK school canteens deploy facial recognition technology
British pupils in nine schools in North Ayrshire from today will start paying for lunches using their faces. The schools claim the new system speeds up queues and is more Covid-secure than the card payments and fingerprint scanners they used previously. But privacy campaigners said the move risks normalises facial recognition technology in public spaces.
3. Klarna shapes up ahead of regulation
The popular “buy now, pay later” credit company Klarna has unveiled sweeping changes to its services in the UK ahead of an expected crackdown by regulators. The fintech company, which was valued at $46bn in a recent investment round, will introduce new wording to make it “absolutely clear” to customers that they are being offered credit, with penalties for missed payments.
4. Apple’s privacy changes pave way for advertising win
Apple’s advertising business has more than tripled its market share in the six months after it introduced privacy changes to iPhones that obstructed rivals, including Facebook, from targeting ads at consumers. Apple’s Search Ads business offers sponsored slots in the App Store that appear above search results. Users who search for “Snapchat”, for example, might see TikTok as the first result on their screen.
5. THG chief executive gives up his golden share
UK ecommerce company THG plans to scrap its founder and chief executive’s special share rights by the end of 2022, as it tries to restore investor confidence after sharp falls in its share price. THG said on Monday it will scrap Matthew Moulding’s golden share arrangement, which gives him an effective veto over any hostile takeover of the company and is one of the reasons it adopted a standard listing, which prevents its shares being included in FTSE indices, when it floated in September 2020.
Tech tools — making you look good in the kitchen
Jamie Waters from How to Spend It found the Kakugama cooking pot (£1,990) upped his game in the kitchen, perfect for slow-cooked dishes such as stews and ragus, as well as for cooking rice and whole vegetables. Japanese carbon-graphite specialist Anaori used the material to make a pot with excellent heat conductivity to cook food evenly with little risk of burning things.
Tech week ahead
Monday: Apple is set to kick off its second product event of the season, rumoured to include a new MacBook Pro, Mac mini and AirPods 3.
Tuesday: The world’s largest streaming entertainment service, Netflix, is due to release its third-quarter earnings.
Wednesday: Hardware giant IBM and electronic vehicle maker Tesla will report earnings.
Thursday: Semiconductor maker Intel and social media firm Snapchat will release earnings. WeWork plans to start trading shares around October 21 on the New York Stock Exchange through a Spac merger, subject to agreement from shareholders in the target special purpose acquisition company on Tuesday.
Friday: Telecoms firm AT&T will finish off the earnings week.