Foxconn Converts EV Factory to AI Server Production Amid Slow EV Sales
Taiwanese contract manufacturing giant Foxconn has announced the sale of its electric vehicle (EV) manufacturing facility in Lordstown, Ohio, and plans to convert the site for the production of AI servers. The facility, which Foxconn acquired from startup Lordstown Motors in 2022, will continue to be operated by the company for its new focus.
The strategic pivot comes as Foxconn observes a softening in the North American electric vehicle market, where production capacity has reportedly outpaced demand. This shift aims to strengthen the company’s capabilities in manufacturing AI servers within the United States, a move reported by both Nikkei and The Wall Street Journal.
This decision closely follows Foxconn’s July 30 announcement of a strategic alliance with Taiwan’s TECO Electric & Machinery. This partnership is designed to jointly pursue global AI datacenter business, with TECO providing essential energy infrastructure and Foxconn supplying server hardware and other datacenter components. Foxconn has previously committed to expanding its US presence to produce AI hardware for clients, including Apple, making the Lordstown conversion a direct advancement of these existing ambitions. Foxconn chairman Young Liu has also indicated that AI could reduce manufacturers’ reliance on cheap labor, underscoring the company’s long-term vision for AI.
However, the conversion raises questions regarding the future of Foxconn’s earlier commitment to develop an electric vehicle reference platform for automakers. The company has a history of altering major plans, notably failing to deliver on a promise to build a large LCD display manufacturing plant in Wisconsin.
The move to AI server production aligns with current US government policies that encourage foreign companies to establish manufacturing operations in the USA. These policies have also seen the discontinuation of tax credits for EV purchases and promote a “laissez faire AI policy” aimed at stimulating datacenter construction.
In a related development, EV manufacturer Tesla’s board recently announced an interim award of 96 million shares, valued at approximately $29 billion, to CEO Elon Musk. In a letter to shareholders, the board justified this award by emphasizing the critical importance of retaining Musk as the company transitions from a leader in electric vehicles and renewable energy to a leader in AI, robotics, and related services. This parallel strategic shift by two major tech players highlights a broader industry trend towards artificial intelligence.