OTTAWA — The federal government has tried to sell Foxconn on building some of its electric-vehicle supply chains through Canada as it seeks to establish itself in the auto business, The Logic has learned. 

Though the Taiwanese electronics-manufacturing giant has yet to announce any investments in the country, internal government documents show officials believe the firm has committed to plans to expand its presence here. 

New Taipei City-based Hon Hai Technology Group is best known for its contract production of consumer devices like Apple’s iPhone, but it also develops software and markets its own brands including Belkin and Sharp. The company, more commonly known as Foxconn, made NT$141.5 billion ($6.37 billion) in profit on NT$6.63 trillion ($298.4 billion) in revenue last year. 

About 70 per cent of sales come from production in China, but the firm plans to expand in India, Mexico, Vietnam and the U.S. this year “in response to customers and supply-chain adjustments,” CEO Young Liu said on an earnings call last month. The company is also focusing on new growth sectors, including autos, with a target of NT$1 trillion in electric vehicle revenue by 2025.

As the federal government tries to build out a domestic battery supply chain, it has sought to bring some of Foxconn’s EV business to Canada, documents from Global Affairs Canada (GAC)’s Asia-Pacific sector show. In a memo prepared for International Minister Mary Ng ahead of a scheduled July 2022 call with Liu and other executives, officials suggest she ​welcome the firm and offer to work with it “as it expands its Canadian footprint.” 

The company is “aggressively moving into the electric-vehicle space,” the note states. It cites Foxconn’s purchase of a former General Motors vehicle assembly plant in Lordstown, Ohio, a US$257-million deal that closed last May. The firm has designated the site as its EV-manufacturing hub in North America.

The memo, which The Logic obtained via access-to-information request, proposes that Ng ask whether Foxconn is considering “an expansion of your investments in battery manufacturing in Canada, to supply your EV sites in the U.S.” And it suggests that she should seek to “assure Foxconn of continued [federal government] investment support.” 

Ng did meet with Liu “to discuss foreign direct investment opportunities in Canada,” her spokesperson Alice Hansen confirmed to The Logic. But GAC has not provided any funding to Foxconn or signed any agreements to support it, said departmental spokesperson Jason Kung. He declined to disclose what the firm had told the government about its Canadian expansion plans, citing commercial confidentiality.

Foxconn did not respond to a request for comment by deadline.

Ottawa has pledged billions to automakers and component manufacturers who have committed to construct or expand plants here. The July 2022 memo cites announcements from BASF and a GM-POSCO Chemical joint venture of new battery-materials facilities in Bécancour, Que.; the federal and provincial governments are providing financial subsidies for both, although they have not yet announced how much.

Foxconn does seem to have shown interest in Canada. The memo states that the government’s diplomats in Taipei had “received unofficial confirmation” that Liu had already approved a country investment plan. That includes establishing a software research and design centre (SRDC) in Toronto that would focus on automotive technologies and serve as the firm’s Canadian headquarters. The office would be linked to a similar facility in Taipei, which works on AI, advanced driver-assistance systems, fleet management, data acquisition and security. Further details of the investment plan were redacted in the version of the memo released to The Logic.

The company has yet to declare its Canadian intentions; the memo for Ng notes that Foxconn has postponed announcements of its investments here “a number of times.” But in November 2022, Mitacs, a publicly funded innovation non-profit, announced a deal to support the firm’s Hon Hai Research Institute to develop quantum technology in Canada. The joint release also states that Foxconn is “planning to launch” the SDRC, which will “hire 100 designers and engineers in the first phase.” Quantum projects will take place at “leading universities and research centres in Canada,” and both organizations will both contribute funding for up to 10 participating research interns, Mitacs spokesperson Adam Austen said.   

Executives involved in Foxconn’s EV push have visited Canada. Company CTO William Wei and Jack Cheng, CEO of its MIH Alliance, recorded a segment with the then-executive director of GAC’s Taipei trade office for an Auto Parts Manufacturers’ Association event in May 2021 to tout the consortium, which has developed an EV platform. At the lobby group’s conference in October 2022, Rick Rajaie, Foxconn vice-president of product and business development for EVs, reportedly invited component makers in Ontario to partner with the firm. 

But the federal government’s hopes of a battery plant in Canada supplying Foxconn’s U.S. car-making factories may not come to fruition—at least not imminently. On last month’s earnings call, Liu said the company will build battery cells and packs at existing facilities in Ohio and Wisconsin. And he did not cite Canada among the countries where the firm is planning capital expenditures this year. 

Foxconn already employs about 490 people here across its existing electronics businesses, according to the GAC memo. In May 2016, the firm announced it was acquiring Calgary-based Smart Technologies, an interactive-whiteboard maker, for US$200 million. 

Chasing Foxconn plants hasn’t always paid off for governments. In July 2017, the firm announced plans for a US$10-billion facility in Wisconsin that would create thousands of jobs, with the state offering up to US$3 billion in tax credits. But under a revised April 2021 deal, Foxconn committed to only US$672 million in capital investments, with incentives topping out at US$80 million. But by then, Wisconsin Public Radio reported, the municipality of Mount Pleasant had already paid nearly US$160 million to buy up properties and relocate residents for the facility.