Foxconn Acquires 50% Stake in Mitsubishi Electric’s Auto Parts Unit for $727 Million
The joint venture aims to develop EV platforms in Japan, though the acquired business remains largely focused on traditional components.
Foxconn is purchasing a 50% stake in Mitsubishi Electric’s automotive equipment business for ¥115 billion ($727 million), marking the company’s largest investment to date in its effort to establish a foothold in the electric vehicle supply chain.
What Happened
Hon Hai Precision Industry, Foxconn’s parent company, announced that its investment arm, Lin Yin International Investment, signed a final agreement to acquire half of Mitsubishi Electric Mobility. The two companies will operate the subsidiary as an equal joint venture. The deal values the business at ¥320 billion ($2 billion) in enterprise value and ¥230 billion in equity value. Closing is expected on October 1, 2027, pending antitrust reviews.
Mitsubishi Electric Mobility is not primarily an EV manufacturer; it is a Tier 1 supplier producing components such as alternators, ignition coils, radar sensors, and a smaller portfolio of electric powertrain parts. The unit was spun off from Mitsubishi Electric in April 2024 and will incorporate the remainder of the company’s car business, including overseas automotive operations, before the deal closes.
Why It Matters
The partnership aims to combine Mitsubishi Electric’s electronic control and powertrain technology with Foxconn’s manufacturing scale to develop EV platforms in Japan. The initial target is Japanese automakers, with plans to expand globally under a "Made in/by Japan" banner. The partners are targeting more than ¥1 trillion ($6.3 billion) in revenue for the fiscal year beginning April 2030.
However, the acquired business faces headwinds. It reported ¥875.6 billion ($5.5 billion) in revenue for the fiscal year ended in March, a decline of ¥43.5 billion from the previous year, driven by weaker sales from Japanese automakers in China. The unit operates with a 6.2% margin and expects revenue to drop to ¥820 billion this year. Consequently, Mitsubishi Electric anticipates booking a ¥100 billion impairment charge this fiscal year due to the equity value being below the business’s net assets.
The deal also highlights Foxconn’s evolving strategy. After previous attempts to produce vehicles, including the bankrupt Fisker Pear and the sale of its Lordstown, Ohio factory, Foxconn is pivoting toward component supply and platform development. Notably, the transaction excludes Mitsubishi Electric’s power semiconductor business, which remains separate and is in merger talks with Rohm and Toshiba.
The Bottom Line
Foxconn’s acquisition of half of Mitsubishi Electric’s auto parts unit represents a significant capital commitment to the EV sector, but it involves buying into a mature, shrinking business with modest growth projections rather than a high-growth EV startup.
