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Foxconn teams up with Fisker to make electric vehicles

Electric automaker Fisker Inc said it will work with Apple Inc provider Foxconn to produce over 250,000 vehicles a year starting in late 2023, sending its shares increased 18%.

The deal, codenamed “Project PEAR” (Personal Electric Automotive Revolution), is looking at markets worldwide, including North America, Europe, China, and India, Fisker said.

Foxconn, Apple’s main iPhone maker, has increased its interest in electric vehicles (EVs) over the past year or so, announcing deals with Chinese electric automaker Byton and automakers Zhejiang Geely Holding Group and Stellantis NV’s Fiat Chrysler unit.

Sources have said Apple is targeting 2024 for producing a passenger vehicle.

Foxconn intends to provide components or services to 10% of the world’s EVs by 2025 to 2027, Chairman Liu Young-way said in October.

The Taiwan-based company’s approach poses a significant threat to established automakers that technology companies such as Apple and other non-traditional players could use contract assemblers as a shortcut to competing in the automobile market.

“A lot of auto suppliers and manufacturers are looking to get a piece of this explosive growth that’s ahead for the global electric vehicle market,” said CFRA Research analyst Garrett Nelson, who has a “buy” rating on Fisker.

Fisker CEO Henrik Fisker informed Reuters that Foxconn is more than just a contract manufacturer under this deal and is developing the automobile with the startup. He expects the deal to be finalized in the second quarter and to last about seven years. The terms of the deal were not revealed.

Fisker said the new vehicle would be “futuristic” and “something completely different,” as well as “affordable”. It will launch in the fourth quarter of 2023, and is one of the four automobiles Fisker earlier said it would introduce by 2025, he said.

“We’re not just going to make another electric car,” Henrik Fisker said in an interview. “We want to introduce things that probably will almost feel a little scary to some people.”

The place where the automobile will be built by Foxconn has not been set, he said.

The EV sector has been rising, with Tesla Inc still the market leader. On Tuesday, luxury electric automaker Lucid Motors announced plans to go public by merging with a blank-check company.

The latest run-up in valuations of several EV startups, including Nikola and Lordstown Motors, which have yet to produce saleable vehicles or meaningful revenue, has drawn comparisons to the dotcom bubble of 1999 to 2000, with analysts and investors anticipating a near-term correction.

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