Foxconn parent Hon Hai Precision has agreed to spend 115 billion yen (about 48.7 billion yuan, or $770 million) to acquire a 50 percent stake in Mitsubishi Electric's automotive components business, according to Chinese outlet D1EV. The two companies announced the deal at a Tokyo press conference on Monday, valuing the unit at 320 billion yen on an enterprise-value basis.
Mitsubishi Electric, which has supplied vehicle electronics for decades, will book an impairment loss of roughly 100 billion yen (about 47.5 billion yuan) this fiscal year to complete the transaction, preferring to take the hit rather than keep the business on its books. The unit posted revenue of 876 billion yen and operating profit of 54 billion yen in the fiscal year ended March, and the partners aim to grow it into a business generating more than 1 trillion yen in sales.
What Foxconn gets
Under the cooperation agreement, Mitsubishi Electric will supply e-drive systems, autonomous driving technology and in-vehicle intelligence for EV platforms developed by Foxconn. Jun Seki, Foxconn's chief strategy officer for EVs, said the most attractive assets were Mitsubishi Electric's motor control technology and its deep software resources.
The deal pairs Mitsubishi Electric's core technologies - e-drive systems, in-car radar and motor control - with its stable customer base among Japanese automakers such as Toyota, Nissan and Honda. Foxconn brings the rapid development and mass-manufacturing efficiency honed in consumer electronics, and has already shown reference EVs including the Model C, Model B and Model E, plus the Model A aimed at Japan unveiled at Hon Hai Tech Day 2025.
The two sides plan to combine Mitsubishi Electric's automaker relationships with Foxconn's fast development model, expanding from traditional auto parts into EV and autonomous driving platforms. The transaction is expected to close in October 2027, after which the parts business will become a 50-50 joint venture and will no longer be consolidated into Mitsubishi Electric's financial statements.
A heavy asset offloaded
For Mitsubishi Electric, the deal sheds a capital-heavy division while Foxconn gains an automotive technology platform with a "Made in Japan" pedigree. Mitsubishi Electric said it will update its full-year earnings forecast on October 30 to reflect the impairment charge.
The acquisition marks Foxconn's most significant move yet into automotive components, following its earlier push into EV manufacturing with models designed for contract production. By tapping Mitsubishi Electric's engineering base, Foxconn aims to strengthen its position as a supplier to traditional automakers transitioning to electric and software-defined vehicles.
