Taiwan's Foxconn is acquiring half of Japan's Mitsubishi Electric's automotive parts business as it moves to expand its electric-vehicle business. The two companies will jointly develop an EV platform in Japan and pursue entry into global markets.

Electrek reported on Oct. 19, local time, that Foxconn parent Hon Hai Precision Industry, through investment subsidiary Lin Yin International Investment, signed a final agreement to buy a 50% stake in Mitsubishi Electric Mobility for 115 billion yen (967.7 billion won).

The transaction values the business at 320 billion yen and the equity stake at 230 billion yen. The deal is expected to be completed on Oct. 1, 2027, after reviews by competition authorities and other procedures.

The two companies will combine Mitsubishi Electric's electric powertrain, software and vehicle control technologies with Foxconn's mass-production capabilities. They plan to develop a Japan-made EV platform, supply it first to Japanese automakers and then expand to overseas markets. Their revenue target is at least 1 trillion yen in the fiscal year starting in April 2030.

A variable is that the acquisition target is not an EV specialist. Mitsubishi Electric Mobility is a traditional auto parts maker that produces generators, starters, ignition coils and radar sensors. It also supplies EV components, but it did not disclose the sales share by product. In particular, its silicon carbide (SiC) and IGBT power semiconductor business used in EV inverters is excluded from the acquisition.

Foxconn set a goal in 2020 of supplying parts or services to 10% of the world's EVs, but some EV projects did not reach mass production. Attention is focused on whether this acquisition can put Foxconn's EV business on a full-fledged growth track.