Foxconn’s $727M Mitsubishi Bet Bypasses Key EV Chips

Foxconn is spending $727 million to buy half of a Japanese automotive supplier, but the most valuable electric vehicle components in that supplier’s portfolio are staying behind.

The acquisition target, Mitsubishi Electric Mobility, retains its silicon-carbide and insulated-gate bipolar transistor power modules under the terms announced this week. Those semiconductors control how electricity flows from an EV battery to its motor. They represent some of the highest-margin, most strategically critical hardware in modern electric cars. Foxconn gets the alternators, starters, ignition coils and radar sensors instead.

That exclusion highlights a structural problem for the Taiwanese electronics giant. Foxconn wants to become a contract manufacturer for other companies’ electric vehicles. It lacks the deep automotive engineering bench required to convince legacy automakers to hand over production lines. The joint venture with Mitsubishi Electric aims to fix that deficit by combining the Japanese firm’s vehicle-control software with Foxconn’s factory operations, targeting sales first to Japanese brands before expanding overseas, according to the companies.

“What attracted us most was the electronic-control technology – and the substantial software resources behind them,” Jun Seki, Foxconn’s chief strategy officer for EVs, said at a news conference in Tokyo.

Software integration matters more than hardware right now. Legacy automakers have struggled for years to build reliable operating systems for their EVs. Volkswagen delayed multiple vehicle launches due to software failures at its Cariad unit. Buying into Mitsubishi Electric’s established code base gives Foxconn a shortcut past those development bottlenecks.

But the timing carries risk. Much of Mitsubishi Electric Mobility’s current revenue comes from internal combustion engine components. Alternators and ignition coils have no place in a fully electric drivetrain. Foxconn is effectively financing a business in managed decline while hoping the software and autonomous-driving assets translate to battery-powered platforms.

The deal structure reflects Mitsubishi Electric’s broader retreat from the auto sector. The company spun off these operations into Mitsubishi Electric Mobility in April 2024. It previously exited car multimedia and fuel injectors, and handed its lighting business to Stanley Electric. Before the Foxconn transaction closes, Mitsubishi Electric will consolidate remaining automotive operations from overseas subsidiaries into the mobility unit.

Mitsubishi Electric has already proven difficult to partner with on EV hardware. In May 2024, Mitsubishi Electric Mobility and Aisin agreed to form a joint venture focused on traction motors, inverters and control software. Five months later, they abandoned the joint-venture plan entirely, settling for a looser business alliance instead.

Foxconn’s investment arm, Lin Yin International Investment, will execute the purchase. Closing is expected in October 2027 following antitrust reviews.

For Foxconn, the three-year wait adds to a string of stalled automotive ambitions. The company planned to build Fisker’s Pear EV at a factory in Lordstown, Ohio. Fisker filed for bankruptcy in 2024 before production started. Foxconn sold the plant last year.

Some partnerships have survived. Mitsubishi Motors — a separate entity from Mitsubishi Electric — is rebadging the Foxtron-developed ASX VR-e for sale in Australia and New Zealand. Foxconn also operates a bus joint venture with Mitsubishi Fuso and supplies Saudi Arabia’s Ceer EV brand.

Landing a major Japanese automaker as a platform customer through the new Mitsubishi Electric venture would mark a shift from these smaller regional deals. Whether that happens without access to Mitsubishi Electric’s power semiconductors remains an open question.