Hon Hai Aims to Use AI to Expand Its Push into Electric Vehicles

(Bloomberg) -- Hon Hai Precision Industry Co., best known as the maker of Apple Inc.’s iPhone, is expanding its push into electric vehicles by integrating artificial intelligence, attempting to bolster its strategy for one of the hottest segments of the automotive industry.

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At an event in Taiwan complete with lasers and thumping music, Hon Hai Chairman Young Liu drove on stage in a shiny blue Model B electric car with a surprise guest. Jensen Huang, chief executive officer of the AI chip leader Nvidia Corp., joined him to talk about their efforts to make vehicles smarter, with technologies like autonomous driving and other features.

The duo sketched out a concept they called an “AI Factory,” through which the companies would collect data from electric vehicles and then feed the information back to make improvements in a car’s technology.

“This car would of course go through life experience and collect more data, the data would go to the AI factory,” said Huang. “The AI factory would improve the software and update the entire end to end system.”

The pair joked that the Model B designation stood for “beauty” and “beast.”

Hon Hai built its success as a behind-the-scenes producer of consumer electronics gear for companies from Apple and Amazon.com Inc. to HP Inc. and Sony Group Corp. But as the personal computer and smartphone markets have stagnated, the Taiwanese company has tried to pivot into automobiles for growth.

Liu, as far back as 2020, had sketched out a goal of capturing 10% of the global EV market by 2025, from essentially nothing. But Hon Hai, also known as Foxconn, has stumbled in some of its early initiatives.

Hon Hai established an automotive outpost in the US last year by acquiring Lordstown Motors Corp.’s manufacturing facilities in Ohio, and then began building EVs for the company last September. But the two companies fell into a bitter dispute, leading to Lordstown’s bankruptcy filing in June. A second potential customer for the Ohio factory, IndiEV Inc., filed for bankruptcy in October.

Hon Hai’s electric vehicle unit, Foxtron, and Taiwanese partner Yulon Motor Co. are scheduled to deliver their first cars to customer Luxgen Motor Co. in the fourth quarter. But it is not clear when mass production of the car will start.

At the Taiwan event, Liu said the model of an AI factory could be replicated for all sorts of industries. His goal is to bring Hon Hai’s expertise in building behind-the-scenes capabilities for brand-name customers to sectors, including smart cities, smart manufacturing and smart EVs.

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