Why The Foxconn And Stellantis Mobile Drive Collaboration Is Important

Hon Hai Precision Industry Co., Ltd. HNHPF, better known as Foxconn, is plunging deep into the EV arena by striking multiple partnerships, while it strives to diversify its revenue streams.

What Happened: Stellantis NV STLA and Foxconn signed a non-binding memorandum of understanding to set up a 50-50 joint venture, named Mobile Drive, based in the Netherlands. This venture will develop digital cockpits and personalized connected services.

Mobile Drive, according to the companies, will combine Stellantis' global vehicle design and engineering expertise with Foxconn's foundry expertise in smartphones and consumer electronics.

The companies expect the partnership to accelerate development timelines to bring "innovative in-vehicle user experience, enabled by advanced consumer electronics, HMI interfaces and services."

Mobile Drive will operate as an automotive supplier, competitively bidding to supply software solutions and related hardware for Stellantis and other interested automakers, the companies said.

Some of the areas the venture will focus on would be infotainment, telematics and cloud service platform development with software innovations, including artificial intelligence-based applications, 5G communication, upgraded over-the-air services, e-commerce opportunities and smart cockpit integrations.

Related Link: Fisker Strikes Partnership With Foxconn's Sharp Unit To Make EV Displays

Why It's Important: Foxconn has in recent times announced multiple partnerships, especially in the automotive industry. The company has struck a deal with U.S.-based Fisker, Inc. FSR for manufacturing its second EV model for the North America, Europe and China markets.

The Taiwanese company was also reportedly scouting for locations in either the U.S. or Mexico to build its own EV manufacturing unit in North America.

In October, Foxconn established the MIH platform, its open software and EV chassis platform for developing EVs. Foxconn is also known as a supplier for Apple Inc. AAPL.

For Stellantis, formed by the merger of Fiat Chrysler and PSA Group, the partnership with Foxconn could mean strengthening its presence in the Chinese market, which boasts of immense potential.

Price Action: At last check Tuesday morning, OTC-listed Foxconn shares were rallying 6.74% to $7.60, while Stellantis shares were up 0.27% to $18.41.

Related Link: Apple Supplier Foxconn: Chip Supply Shortage Will Hurt Shipments, Last Through 2022

(Photo courtesy of Stellantis)