Foxconn Has a Plan to Upend the Electric Vehicle Industry

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:17)

Tracy, you know what I was thinking? There's so much attention to Elon Musk and all of his controversies and the things that he does in his personal life and Twitter and potentially buying Twitter and the tweets and everything.

I think sometimes people forget what an extraordinary success or what an extraordinary company, just like Tesla has been over the last decade.

Tracy Alloway (0:42)

Oh boy, where to start? Well, first of all, a cynic might say that Elon Musk courts that kind of controversy quite actively and that maybe if he wanted the focus to be on what Tesla was doing, he could go about it a different way. But anyway, yes, Tesla, Tesla, I mean, just looking at the share price, it's down obviously from its peak, but over its history, it's a very successful company from a purely financials basis or just looking at the share price.

Joe Weisenthal (1:15)

Yeah, and when I think about the last decade, obviously it was about the rise of software, software is eating the world, cryptocurrency, all these sort of things that just exist in code.

And here is a company that became the biggest car company in the world, at least by market cap, by actually manufacturing something that is actually built. And so this was a decade in which people weren't really into manufacturing and really weren't into capital intensive businesses.

And yet during that decade, this one company sort of like just did extraordinarily well at a time when that wasn't really that cool.

Tracy Alloway (1:54)

Right, okay, so this is possibly one of the few things that you cannot fault Elon Musk for, but he certainly likes to make things, right? And you can debate whether or not those things are realistic, but everything from electric cars to flame throwers to tunnels underground.

Joe Weisenthal (2:13)

Satellite launching equipment that land.

Tracy Alloway (2:15)

Starlink, yeah. He makes things at a time when the emphasis wasn't really on making things. It was on software, as you mentioned, and sort of the ephemeral stuff, big ideas and changing the world through technology, but not necessarily tangible technology.

Joe Weisenthal (2:33)

Right, and of course, one of our themes, and it's something that we hit on with a lot of our commodities episodes and some of our conversations with Jeff Curry and all kinds of things that we've been doing over the last year has been about this sort of the revenge of the real, the tangible economy, actually putting stuff together. It's really hard, but it's sort of, it feels like the sort of like physical engineering is gonna be one of the huge themes of this next decade.

Tracy Alloway (3:01)

Yeah, I think that's right. And again, I think maybe we're so used to thinking about technology as like a search engine or a software company, but it feels like that might be starting to change. And nowadays when people think about technology, when they think about technological prowess, it feels like a lot of people think about things like semiconductors and chips and the actual physical components that drive that kind of technological innovation.

Joe Weisenthal (3:30)

Yeah, and so when you think about like manufacturing tech, right, like, okay, we're talking about who's manufacturing. You might think of Taiwan Semiconductor, which of course we've done episodes, Intel, and then another name that has to come up in all of that has to be Foxconn, which everybody knows is basically the company that makes the iPhones, the company that assembles the iPhones.

Tracy Alloway (3:53)

Yeah, that's right. So I think, again, this is sort of one of the big themes that has come out of the past couple of years in the global pandemic, but also even the trade war before that.

But we all are intensely aware now of how these tech supply chains actually work and where things are made and who is putting them together.

Joe Weisenthal (4:13)

Yeah, and so did you know, well, I didn't know this stuff until recently, but did you know that Foxconn itself wants to get into the electric vehicle game?

Tracy Alloway (4:25)

I didn't know that either. I know that the head of Foxconn, Terry Kuo, I know he's an ambitious guy. He has plans, but I didn't know about this specific space. So yeah, I'm interested in learning more about it.

Joe Weisenthal (4:41)

Yeah, and I think you're sort of like, it's hard to understand the world over the last several decades without understanding the trajectory of Foxconn. And so the fact that they want to be a player in EVs is really interesting. So I think we should talk about it.