TAIPEI -- Apple supplier Foxconn plans to build cars by 2023 in the U.S. after reaching an early stage deal with Fisker, an American electric-vehicle startup.
Foxconn, which trades as Hon Hai Precision Industry, on Wednesday announced a memorandum of understanding with New York-listed Fisker to codevelop an EV model with planned mass production in the fourth quarter in 2023.
The plan shows how the Taiwanese group, the world's biggest contract electronics manufacturer, is pushing to become a big EV player in a quest for growth beyond smartphones.
"The U.S. market will be the first priority and Foxconn is mulling a plan to build the car in its complex in Wisconsin for the American market," a person close to Foxconn told Nikkei Asia.
The car would be built under the Fisker brand and will target North America, Europe, China and India, according to the company announcement.
"The collaboration between our firms means that it will only take 24 months to produce the next Fisker vehicle -- from research and development to production, reducing half of the traditional time required to bring a new vehicle to market," Foxconn Chairman Young Liu said.
Henrik Fisker, CEO of Fisker, said on Twitter Wednesday that the car would be "so revolutionary" that details would be kept secret until its launch at the end of 2023.
It will be Fisker's second EV model following the launch of its Ocean SUV -- to be made by Magna International -- in the fourth quarter of next year.
Foxconn plans an annual volume of more than 250,000 units, the Apple supplier said, without giving a concrete timetable for the target. The two companies are scheduled to sign a formal agreement for the collaboration next quarter.
Foxconn's move to start building Fisker cars in the U.S. came as American President Joe Biden is set to sign an executive order to review critical supply chains from semiconductors and batteries to vital materials for automobiles and weapons.
The Apple supplier has no experience in making cars. But it will build on its recent joint venture with Yulon Group, Taiwan's second-biggest automaker, as well as a partnership with Chinese EV startup Byton, to increase its know-how, another source familiar with the situation said.
Foxconn's decision to make electric vehicles for others shifts its previous strategy of avoiding the business of assembly.
Founder and former chairman Terry Gou once said Foxconn will not get into the business of building the "full car," citing strict safety issues as a top concern.
Foxconn had announced plans for an open software and hardware platform, called MIH, and Liu last week said the first two to three electric vehicles built using the platform will be released by the end of this year, a breakthrough for the Taiwanese company's EV efforts.
But Liu also stressed Foxconn's capability as a software and hardware open platform operator, rather than showing an interest in assembling cars.
The planned collaboration with Fisker -- dubbed Project Pear -- will mainly be the California-based company's design and it is yet to be decided if it will use part of Foxconn's platform.
Foxconn has been aggressively venturing into EV fields since last year, seeking new revenue sources to counter the slowing smartphone industry.
Its customizable platform -- which includes a chassis, electronic architecture and support for autonomous driving -- is designed to make it quicker and easier for automakers to turn out new electric cars. Foxconn has been inviting suppliers across a range of industries to join an MIH-based alliance and says it has attracted more than 700 companies, including Qualcomm, MediaTek, Arm, AWS and STMicroelectronics.