Hon Hai’s electric vehicle (EV) business kicked off the Year of the Golden Rabbit with good news, as it is reportedly in talks with General Motors (GM), the largest automaker group in the U.S., for an OEM order. This aligns with the Biden administration’s goal of “leading the American EV industry.” As Hon Hai expands its EV footprint, it also boosts the operational momentum of its automotive supply chain, including companies like Innolux, Yihsin Precision-KY, Broadex, and Hon Precision.
Hon Hai declined to comment on the rumors yesterday (January 29). Previously, Jerry Hsiao, Hon Hai’s Vice President and Chief Product Officer overseeing North American EV operations, hinted that, bolstered by the U.S. Inflation Reduction Act (IRA), Hon Hai was negotiating OEM partnerships with four major traditional automakers from the U.S., Japan, South Korea, and Europe. He projected that mass production of EVs for these traditional automakers could begin in the second half of 2023, with an explosive growth phase in 2024. Market analysts speculate that the U.S.-based traditional automaker Hon Hai is negotiating with is General Motors.
Sources indicate that during the financial crisis, General Motors was bailed out by the U.S. Treasury, which took a majority stake, effectively making it a state-owned enterprise. Since then, GM has aggressively pivoted to renewable energy vehicles, aligning with Biden administration policies as a state-backed entity. The company has committed to investing $20 billion (over NT$600 billion) in EVs by 2025 and plans to launch 30 pure electric models by that year, creating an urgent need for production capacity.
With the automotive chip shortage still unresolved, it poses a potential obstacle to GM’s renewable energy vehicle ambitions. Industry rumors suggest that GM has approached Hon Hai, proposing a “chips-for-OEM” collaboration model. Leveraging Hon Hai’s vast chip resources as a leading electronics OEM, GM aims to secure a steady supply of automotive chips, while in return, entrusting its EV production to Hon Hai.
Industry insiders note that Hon Hai Group and GM share a historical connection. The Ohio plant in the U.S., previously acquired by Hon Hai, was once a GM fossil-fuel vehicle factory. At its peak, it produced 600,000 vehicles annually, making it one of North America’s largest single-model plants.
Additionally, Innolux, part of Hon Hai’s ecosystem, has long been a supplier to GM, providing in-vehicle display solutions. Should Hon Hai Group secure this major EV order from GM, it could quickly hit the ground running.
General Motors, the largest automaker group in the U.S., sold 2.27 million vehicles in the U.S. last year, a 2.5% year-on-year increase. Notably, its fourth-quarter sales surged 41.4%, surpassing Toyota.
Globally, GM produces and sells a range of brands including Buick, Chevrolet, Cadillac, GMC, Wuling, Baojun, and Holden, while accelerating its push into related businesses. It is ramping up production of the all-electric Hummer, and has unveiled new products like the Chevrolet Silverado electric pickup and the Chevy Equinox pure electric SUV, competing with Tesla, Ford, and other rivals for market share.
GM views EVs as a “growth opportunity,” and the industry anticipates the company will roll out more mainstream models, such as the Chevrolet Blazer and Equinox EV crossovers. Previously, market skepticism about chip shortages threatening GM’s EV roadmap had surfaced. Now, with Hon Hai stepping in to ensure a stable chip supply, optimism is high regarding a potential partnership between the two.