What really drives the Foxconn Stellantis joint venture

May 19, 2021 // By Christoph Hammerschmidt
What really drives the Foxconn PSA Joint venture
The launch of the joint venture of Stellantis and Foxconn, Mobile Drive, has the potential to readjust the coordinate system of the automotive industry from several points of view. But there are risks.

The creation of Mobile Drive underlines the importance that software will have for future generations of cars - not only at the functional level such as ADAS or automated driving, but even more so at the level of information and comfort functions, at the level of personalising cars and sharing data. In the future, this level is likely to be at least as important and strategic for the business models of vehicle manufacturers as the functional level. With choosing the cockpit electronics as the primary subject of the JV, Stellantis underlines the paramount importance of this domain for innovative digital user experiences - and for future business opportunities for the automotive industry.

With the foundation of Mobile Drive, Foxconn comes a good deal closer to its goal of becoming a major player in the automotive industry. Milestones towards this goal so far have been the manufacturing contracts with the electric carmakers Fisker and Byton and - even more important - the development of its own platform for electric cars. At the same time, Foxconn is moving up the automotive food chain - from a manufacturing service provider to developer of software for important vehicle functions. One expression of this promotion is that Foxconn does not play the role of a mere service provider, but as part of a 50:50 joint venture and thus on an equal footing with the OEM.

In the case of Stellantis, it is not quite as clear what goals the company is pursuing with the JV. The carmaker could increase the development speed of its cars, but it bears the risk of losing the advantage of competitive unique selling propositions. In this respect, Stellantis’ strategy clearly differs from that of other large OEMs such as BMW, Daimler or Volkswagen, which consider their software to be competitively relevant and want to keep it under their exclusive control.

It is quite possible that this will allow Stellantis to

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