Hon Hai Technology Group, known as Foxconn, has signed a definitive agreement through its investment arm to acquire a 50% stake in Mitsubishi Electric Mobility, the automotive parts unit of Mitsubishi Electric, for 115 billion Japanese yen, equivalent to approximately 727 million US dollars. The two companies are set to operate the unit as a joint venture, with the deal expected to close on October 1, 2027, following the completion of antitrust reviews.
The target company is not a pure electric vehicle company, but rather a traditional Tier 1 supplier that produces a wide range of components, including alternators, ignition coils, radar sensors, and two components related to electric powertrain systems. The total value of the project is approximately 320 billion yen (2 billion dollars) in terms of enterprise value, while the equity value is estimated at 230 billion yen.
Strategic Goals and Electric Vehicle Platforms
Through this collaboration, the two companies seek to integrate Mitsubishi's vehicle control technologies, software, and electric powertrain systems with Foxconn's speed and scale capabilities. Both sides aim to develop new electric vehicle platforms in Japan, marketing them first to Japanese automakers and then expanding globally under the "Made in Japan" banner, with a target of achieving revenue exceeding one trillion yen (6.3 billion dollars) by the fiscal year beginning in April 2030.
Jun Seki, Foxconn's Chief Strategy Officer for Electric Vehicles and a former Nissan executive, noted that Mitsubishi's electronic control technology was the most attractive element of the deal, confirming the company's aspiration to make Mitsubishi Electric its primary base in Japan for collaboration with other automakers and parts suppliers.
Deal Structure and Technical Limitations
Despite the strategic nature of the deal for the electric vehicle sector, the transaction does not include the power semiconductor division; Mitsubishi Electric has moved to separate its silicon carbide (SiC) power modules and IGBT current regulation units in a separate negotiation path with other companies. This move also comes at a time when the unit is recording a decline in revenue, affected by falling sales of Japanese automakers in China and a shrinking automotive multimedia market in North America.