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Business / Companies

Foxconn charges into EV batteries

By Gao Yuan (China Daily) Updated: 2014-07-29 06:50

Foxconn charges into EV batteries

A motorcyclist rides past the entrance of the headquarters of Hon Hai, which is also known by its trading name Foxconn, in Tucheng, New Taipei city in this December 24, 2013 file photo. [Photo/Agencies]

Foxconn Technology Group is heading to inland Chinese cities in search of profit drivers as the Taiwan-based company looks beyond assembling iPhones and iPads for Apple Inc.

As investors discussed the pros and cons of Foxconn's plant proposal in Bengbu, China's Anhui province, a new investment in the eastern province emerged on Monday.

The world's largest electronics contract manufacturer's battery-making arm agreed to pour more than 2 billion yuan ($323 million) into Anqing to produce lithium batteries, a popular power source for electric cars.

Foxconn declined to comment on the investment on Monday.

A 300-word statement posted on the city government website gave the public its only glimpse into the company's biggest Chinese mainland investment this year by far. The deal, signed as early as May, received strong support from the government.

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China is giving preferential policies to the rapid-growing new-energy vehicle sector.

Su Bo, vice-minister of industry and information technology, said that a research and development bottleneck is a major obstacle hindering the electric automobile adoption rate.

"More government funding will go to the battery R& D segment to help Chinese companies achieve breakthroughs," he said.

The nation had produced 20,692 new-energy vehicles and sold more than 20,000 during the first six months of the year, more than double the number in the same period last year, according to statistics from the China Association of Automobile Manufacturers.

Emerging markets and new technologies are set to be the investment focus for Foxconn, which sped up its expansion on the Chinese mainland about four years ago. It built plants in a number of inland regions such as Henan, Sichuan, Shanxi and Hubei because of lower labor costs there.

Terry Gou, chairman of Foxconn, said in April that the company is actively looking for investment opportunities in the vast inland regions of the country. He praised the infrastructure and favorable policies provided by the inland cities.

"The investment environment in some western parts is as good as in developed regions. Local support removed many of the barriers for us to enter more mainland cities," Gou said.

Apart from Anhui, Foxconn has also heavily invested in Guizhou, a less-developed southwestern province.

Gou pledged to equip the company's Guizhou plant, a major iPhone manufacturing plant, with robots to boost productivity. The 40,000-employee plant is expected to generate 50 billion yuan in revenue by 2018.

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