1. China’s hypersonic glide vehicle test
Relevant for GS Prelims & Mains Paper II; International Relations
A report in the London-based Financial Times on Saturday, citing various sources, says China in August tested a nuclear-capable hypersonic glide vehicle that circled the globe before speeding towards its target. Hypersonic speeds are 5 or more times the speed of sound.
The test, as reported
The FT report mentions five people familiar with the test as saying the Chinese military launched a rocket that carried a hypersonic glide vehicle, which flew through low-orbit space before cruising down towards its target. The test has caught US intelligence by surprise, the report says.
“The missile missed its target by about two-dozen miles, according to three people briefed on the intelligence. But two said the test showed that China had made astounding progress on hypersonic weapons and was far more advanced than US officials realised. The test has raised new questions about why the US often underestimated China’s military modernisation,” the report reads.
The report cites a security official, and another Chinese security expert close to the People’s Liberation Army, as saying the weapon was being developed by the China Academy of Aerospace Aerodynamics (CAAA), under the state-owned China Aerospace Science and Technology Corporation that makes missile systems and rockets for China’s space programme. Both sources reportedly said the vehicle was launched on a Long March rocket, which is used for the space programme.
According to the report, two people familiar with the test said the weapon could, in theory, fly over the South Pole. That would pose a big challenge for the US military because its missile defence systems are focused on the northern polar route.
The report quotes the China Academy of Launch Vehicle Technology as saying on an official social media account on July 19 that it had launched a Long March 2C rocket, its 77th launch. On August 24, it announced a 79th flight. But there was no announcement of a 78th launch, which sparked speculation about a secret launch, the report notes.
“The US, Russia and China are all developing hypersonic weapons, including glide vehicles that are launched into space on a rocket but orbit the earth under their own momentum,” the report says.
India’s DRDO tested a hypersonic vehicle in September last year. Asked about China’s test, a senior DRDO scientist said, “The exact details on technology used by China in this particular test are not known through media sources. But most of the hypersonic vehicles primarily use the scramjet technology. This extremely complex technology, which also needs to be able to handle high temperatures, makes the hypersonic systems extremely costly. It is all about how long can you sustain the systems at those extreme conditions. Most military powers in the world are in the process of developing hypersonic systems.”
Scramjets are a a category of engines designed to handle airflows of speeds in multiples of the speed of sound.
Implications for India
“This test by China certainly needs to be watched closely by the world, especially India considering relations with China in the recent past,” said Air Marshal Bhushan Gokhale (Retd), former Vice Chief of Air Staff. “Such capabilities also highlight the threat for our space assets along with the surface assets. The offence system operating at these speeds would mean requirement to develop defence systems at these speeds.”
He added, “India too is working on hypersonic technologies. As far as space assets are concerned, India has already proved its capabilities through the test of ASAT.”
Hypersonic technology has been developed and tested by both DRDO and ISRO. Last September, DRDO successfully flight-tested the Hypersonic Technology Demonstrator Vehicle (HSTDV), with a capability to travel at 6 times the speed of sound. A solid rocket motor of Agni missile took it to an altitude of 30 km where the cruise vehicle separated as planned. The hypersonic combustion sustained and the cruise vehicle continued on its desired flight path at a velocity of six times the speed of sound for more than 20 seconds.
“The scramjet engine performed in a text book manner. With this successful demonstration, many critical technologies such as aerodynamic configuration for hypersonic manoeuvers, use of scramjet propulsion for ignition and sustained combustion at hypersonic flow, thermo-structural characterisation of high temperature materials, separation mechanism at hypersonic velocities etc. were proven.” DRDO had said in a statement.
Last December, an advanced Hypersonic Wind Tunnel (HWT) test facility of the DRDO was inaugurated in Hyderabad. It is a pressure vacuum-driven, enclosed free jet facility that simulates Mach 5 to 12.
Source: The Indian Express
2. Improving livestock breeding
Relevant for GS Prelims & Mains Paper III; Economics
Revised schemes will enhance the productivity and traceability standards of India’s livestock
Livestock breeding in India has been largely unorganised because of which there have been gaps in forward and backward integration across the value chain. Such a scenario impacts the quality of livestock that is produced and in turn negatively impacts the return on investment for livestock farmers. Approximately 200 million Indians are involved in livestock farming, including around 100 million dairy farmers. Roughly 80% bovines in the country are low on productivity and are reared by small and marginal farmers. To enhance the productivity of cattle, the Rashtriya Gokul Mission was initiated in 2014 with a focus on the genetic upgradation of the bovine population through widespread initiatives on artificial insemination, sex-sorted semen, and in vitro fertilization.
The revised version of the Rashtriya Gokul Mission and National Livestock Mission (NLM) proposes to bring focus on entrepreneurship development and breed improvement in cattle, buffalo, poultry, sheep, goat, and piggery by providing incentives to individual entrepreneurs, farmer producer organisations, farmer cooperatives, joint liability groups, self-help groups, Section 8 companies for entrepreneurship development and State governments for breed improvement infrastructure.
The breed multiplication farm component of the Rashtriya Gokul Mission is going to provide for capital subsidy up to ₹200 lakh for setting up breeding farm with at least 200 milch cows/ buffalo using latest breeding technology. The entrepreneur will be responsible for the arrangement of and would be able to sell at least 116 elite female calves every year out of this farm from the third year. The entrepreneur will also start generating income out of the sale of 15 kg of milk per animal per day for around 180 animals from the first year. This breeding farm will break even from the first year of the project after induction of milk in animals. Moreover, the strategy of incentivising breed multiplication farm will result in the employment of 1 lakh farmers.
The grassroots initiatives in this sphere will be further amplified by web applications like e-Gopala that provide real-time information to livestock farmers on the availability of disease-free germplasm in relevant centres, veterinary care, etc.
The poultry entrepreneurship programme of the NLM will provide for capital subsidy up to ₹25 lakh for setting up of a parent farm with a capacity to rear 1,000 chicks. Under this model, the hatchery is expected to produce at least 500 eggs daily, followed by the birth of chicks that are in turn reared for four weeks. Thereafter, the chicks can be supplied to local farmers for rearing. Under this model, the rural entrepreneur running the hatchery will be supplying chicks to the farmers. An entrepreneur will be able to break even within 18 months after launching the business. This is expected to provide employment to at least 14 lakh people.
In the context of sheep and goat entrepreneurship, there is a provision of capital subsidy of 50% up to 50 lakh. An entrepreneur under this model shall set up a breeder farm, develop the whole chain will eventually sell the animals to the farmers or in the open market. Each entrepreneur can avail assistance for a breeder farm with 500 does/ewe and 25 buck/ram animals with high genetic merit from the Central/State government university farms. This model is projected to generate a net profit of more than ₹33 lakh for the entrepreneur per year.
For piggery, the NLM will provide 50% capital subsidy of up to ₹30 lakh. Each entrepreneur will be aided with establishment of breeder farms with 100 sows and 10 boars, expected to produce 2,400 piglets in a year. A new batch of piglets will be ready for sale every six months. This model is expected to generate a profit of ₹1.37 crore after 16 months and 1.5 lakh jobs. The revised scheme of NLM coupled with the Rashtriya Gokul Mission and the Animal Husbandry Infrastructure Development Fund has the potential to dramatically enhance the productivity and traceability standards of our livestock.
Source: The Hindu
3. Slide in China’s GDP growth and implications for India
Relevant for GS Prelims & Mains Paper II; International Issues
China’s third-quarter GDP growth slowed to 4.9% as industrial output rose way below expectations in September, according to data released by the country’s National Bureau of Statistics on Monday. “Since entering the third quarter, domestic and overseas risks and challenges have increased,” Fu Linghui, spokesperson for the Bureau of Statistics, said in Mandarin at a press conference, according to a CNBC translation.
Is this worrying?
The main reason why growth was below expectation is the tepid rise in industrial production at 3.1% in September, way below the expected 4-4.5%.
There are two factors here: One, it needs to be kept in mind that China was the first off the blocks when it comes to reviving growth after the pandemic. So, inevitably, even as the rest of the world struggles to get back to pre-pandemic levels, the Chinese recovery had already gathered steam and pre-pandemic milestones were crossed quarters ago. The base is consequently a factor in China’s case.
Second, and more worryingly, there are a combination of systemic issues evident in the latest data print that signal potential headwinds, both for the Chinese and the global economies. This includes a massive fuel crunch that is crimping the country’s growth engine, worries of a systemic crisis in its real estate business precipitated by the Evergrande fiasco, and a souring of business sentiment amid the federal government’s crackdown on multiple Chinese sectors and marquee companies that have been mascots of growth over the years.
Monday’s data release does offer indications that businesses were less keen to invest in new projects, according to a Reuters report. Also, the power shortage had a “certain impact” on normal production, the National Bureau of Statistics spokesperson said, according to the CNBC translation, while underlining that the economic impact is “controllable”.
The fuel/power crisis in China continues to fester. Factories and units across the country’s industrial heartland in its south east have had to curtail output in late September as a surge in coal prices and a resultant electricity shortage prompted provincial governments to cut power supplies.
The turmoil in the real estate sector, which accounts for about a quarter of China’s GDP, is now beginning to show up in the data as well, with fixed asset investment for the first three quarters of the year coming in lower than expected. The drop in fixed asset investment is being primarily attributed to a perceptible slowdown in real estate investments. In August, real estate major Evergrande warned of a default and subsequently missed payments to investors in its offshore US dollar-denominated debt. The Peoples Bank of China said Friday that Evergrande is an exception and that other developers were unaffected. But there are lingering concerns of a cascading impact across sectors.
Would there be an impact on India?
There are concerns that a slowing Chinese economy could impact the incipient global recovery. India too could see an impact, given that the country’s bilateral trade with China has grown nearly 50 per cent in the first nine months of 2021, according to Chinese government data.
According to India’s Commerce Ministry data, China was India’s top trading partner in the April-July period, followed by the US, the UAE, Saudi Arabia and Singapore.
India’s imports from China rose to $68.5 billion in the first nine month of 2021, up 52 per cent from the corresponding period in 2020, according to the China General Administration of Customs data, pushing India’s trade deficit with China to $46.55 billion in the first nine months of 2021, up from $29.9 billion in the year-ago period. India’s total trade with China touched $90.38 billion during the January-September period, and is likely to cross $100 billion by the end of the year. Some of India’s major imports from China include smartphones and automobile components, telecom equipment, active pharmaceutical ingredients, and other chemicals.
A slowing Chinese economy portends worries on the buoyant trade front, apart from the overall loss of momentum to the global post-pandemic economic recovery.
Source: The Indian Express
4. Trouble in Bangladesh: On attacks against Hindus
Relevant for GS Prelims & Mains Paper II; International Issues
The UN, the U.S. and India have condemned incidents of majoritarian violence against Bangladesh’s Hindu minority community during Durga Puja in the past few days. What is particularly worrying is that the attacks which have left at least six people dead and dozens injured, have followed, according to the Government, fake news reports shared over social media, indicating a conspiracy to instigate the violence. The mob violence appears to have begun in Comilla, in Chittagong district, where an image allegedly showing disrespect to the Koran was circulated, and resulted in several major mob attacks on Hindu temples and homes belonging to the minority community.
Indian government view
The Narendra Modi government, which has sought to preserve good relations with Bangladesh’s Sheikh Hasina government, has also praised the authorities for moving quickly to take control of the situation.
The Indian High Commission in Dhaka, which was in touch with law and order officials at the Centre, also stepped in to meet with members of the Bangladeshi Hindu community, including representatives from the ISKCON group that was attacked. The ISKCON headquarters in West Bengal as well as BJP leaders also called on Mr. Modi to personally intervene.
Given the seriousness of the attacks and the fear that has gripped the Hindu minority in Bangladesh, the international and Indian concern is not surprising. However, New Delhi will have to act cautiously in light of all the various links between India and Bangladesh. While the Indian High Commission’s act of meeting local minorities comes from a sense of compassion, it could be read as an act of interference. The impact of the Citizenship (Amendment) Act in 2019 had a widespread effect in Bangladesh, and at least 12 people were killed in protests against Mr. Modi’s visit to Dhaka earlier this year. As a regional leader, India has every right to be concerned about the plight of communities in the subcontinent. However, it must ensure that its domestic drivers do not upset carefully built foreign relations. And any act that is seen as religiously partisan is bound to destabilise the otherwise close and productive relations between the two countries, which have a shared history of cooperation over much of the past 50 years.
Bangladesh government accusation
According to the police, more than 450 people have been arrested over the past week of violence and more than 70 cases filed in different parts of Bangladesh. Prime Minister Hasina has promised strict action and sought to reassure minorities during an address via video conference to Hindu devotees at the Dhakeshwari national temple.
In a message for New Delhi, she also said that Bangladesh’s big neighbour must be sensitive to the situation, and alluding to violence against minorities in India, asked that “nothing is done there [India] that affects our country [Bangladesh]”.
Source: The Hindu
5. Why global fuel prices are up, how India is impacted
Relevant for GS Prelims & Mains Paper III; Economics
As the global recovery gains strength, the price of crude oil is nearing its highest level since 2018, while the price of natural gas and coal are hitting record highs amid an intensifying energy shortage.
Why are fuel prices rising?
The price of Brent Crude breached the $85 per barrel mark earlier this week reaching its highest level since 2018 on the back of a sharp increase in global demand as the world economy recovers from the pandemic. Key oil producing countries have kept crude oil supplies on a gradually increasing production schedule despite a sharp increase in global crude oil prices. The price of Brent crude has nearly doubled compared to the price of $42.5 per barrel a year ago.
In its latest round of meetings, the OPEC+ group of oil producing countries reaffirmed that they would increase total crude oil supply by only 400,000 barrels per day in November despite a sharp increase in prices. The output of the top oil-producing countries – Saudi Arabia, Russia, Iraq, UAE and Kuwait — would still be about 14 per cent lower than reference levels of production post the increase in November.
OPEC+ had agreed to sharp cuts in supply in 2020 in response to Covid-19 global travel restrictions in 2020 but the organisation has been slow to boost production as demand has recovered. India and other oil importing nations have called on OPEC+ to boost oil supply faster, arguing that elevated crude oil prices could undermine the recovery of the global economy.
Natural gas deliveries to Asia hit an all-time high of $56.3 per mmbtu (Metric Million British Thermal Unit) for deliveries in November, according to SP Global Platts. Supply side issues in the US including disruptions caused by hurricane Ida and lower than expected natural gas supplies from Russia amid increasing demand in Europe have raised the prospect of natural gas shortages in the winter.
Source: Petroleum Planning & Analysis Cell, Government of India
International coal prices have also reached all-time highs as China faces a coal shortage that has led to factories across China facing power outages. A faster than expected recovery in global demand has pushed the price of Indonesian coal up from about $60 per tonne in March to about $200 per tonne in October.
What is the impact on India?
High crude oil prices have contributed to the prices of petrol and diesel regularly setting new record highs across the country in 2021. The price of petrol in the national capital is Rs 105.84 per litre up Rs 4.65 per litre over the last three weeks while the price of diesel is at Rs 94.6 per litre up Rs 5.75 per litre over the same period.
India has seen a faster recovery in the consumption of petrol than of diesel after pandemic-related restrictions with petrol consumption up 9 per cent in September compared to the year ago period but diesel consumption remaining 6.5 per cent below 2020 levels. Diesel accounts for about 38 per cent of petroleum product consumption in India and is a key fuel used in industry and agriculture.
S&P Global Platts Analytics noted in a report that demand for diesel in India was expected to go up in the next few months with the upcoming festive season set to accelerate the economic recovery and push up diesel consumption. Platts Analytics did however predict that India’s total demand for crude oil would only surpass pre pandemic levels in 2022.
High international gas prices have led to an upward revision in the price of domestically produced natural gas. The Petroleum Planning and Analysis Cell (PPAC) set the price of natural gas produced by state owned ONGC and Oil India under the nomination regime to $2.9 per mmbtu up from $1.79 per mmbtu in the previous six month period. The PPAC also increased ceiling price of $6.13 per mmbtu for gas extracted from ultra deep water, and high pressure, high temperature discoveries from $3.62 per mmbtu in the previous six month period.
The increase in gas prices has put upward pressure on the price of both Compressed Natural Gas (CNG) used as a transport fuel and Piped Natural Gas (PNG) used as a cooking fuel. The price of CNG was hiked twice by a total of Rs 4.56 per kg this month to Rs 49.8 in the national capital and the price of PNG rose by Rs 4.2 per scm (standard cubic meter) of PNG to Rs 35.11 per SCM.
High international prices of coal have added to a coal shortage at India’s thermal power plants by forcing thermal plants using imported coal that could not pass on the higher price of coal to procurers to stop supplying power. Low coal stocks at a number of coal fired thermal power plants have led to power outages in a number of states including Punjab and Rajasthan and have forced states to buy power at well above normal prices on the power exchange.
Source: The Indian Express
6. India, Israel, UAE, U.S. decide to launch quadrilateral economic forum
Relevant for GS Prelims & Mains Paper II; International Organizations
India, Israel, the United Arab Emirates (UAE) and the United States decided to launch a new quadrilateral economic forum, as External Affairs Minister S. Jaishankar joined his counterparts at a meeting via videoconference from Jerusalem, where he is on a five-day visit.
The quadrilateral, which followed his bilateral meeting with Israeli Alternate Prime Minister and Foreign Minister Yair Lapid, builds on ongoing cooperation between the U.S.-Israel-the UAE after the Abraham Accords last year that saw the UAE and Israel establish diplomatic ties, and the India-Israel-the UAE cooperation that has been launched since then.
Mr. Jaishankar said it was a fruitful first meeting with Mr. Lapid, UAE Minister of Foreign Affairs Sheikh Abdullah Bin Zayed and U.S. Secretary of State Antony Blinken “on economic growth and global issues”.
In an interesting aside, Mr. Jaishankar’s travel to Israel is also routed via the UAE, on flights that started as a consequence of the Abraham Accords and the opening of diplomatic missions and flights between them.
Mr. Lapid noted that the grouping had decided to establish an international forum for economic cooperation, and specifically discussed “possibilities for joint infrastructure projects”.
The U.S. State Department said that during the meeting, the four ministers discussed “expanding economic and political cooperation in the Middle East and Asia, including through trade, combating climate change, energy cooperation, and increasing maritime security,” as well as ways to counter the COVID-19 pandemic.
Foreign Ministers of the U.S., Israel and the UAE met in Washington on October 13 to discuss the modalities of trilateral cooperation, and set up two working groups: on religious coexistence and on water and energy.
Business groups in India, the UAE and Israel have also been in talks for cooperation since diplomatic ties were established, and the International Federation of Indo-Israel Chambers of Commerce (IFIIC) has predicted that the potential for agreements, backed by Israeli innovation, the UAE funding and Indian manufacturing, given India’s close ties and strategic partnership with the two other countries, could cross $100 billion by 2030. In the first such venture, a UAE project for robotic solar (panel) cleaning technology was signed by Israeli company Ecoppia that has a manufacturing base in India.
No mention of Palestine
Significantly, neither the quadrilateral meeting, nor the trilateral meeting discussed the issue of Palestine and resuming the “Middle East peace process”, although the Joe Biden administration has expressed support for a “two-state solution”, that is in line with India’s broader position.
On Monday, Mr. Jaishankar and Mr. Lapid held bilateral talks, agreeing to resume long-pending negotiations for a free trade agreement, a mutual recognition agreement on COVID-19 vaccine certificates, beginning with Israeli acceptance of Indian travellers vaccinated with Covishield, and Israel’s joining the International Solar Alliance.
Source: The Hindu
7. IMF outlook and status of jobs
Relevant for GS Prelims & Mains Paper II; International Organizations
Last week, the IMF unveiled its 2nd World Economic Outlook (WEO). The IMO comes out with the report twice every year — April and October — and also provides regular “updates” to it on other occasions. The WEO reports are significant because they are based on a wide set of assumptions about a host of parameters — such as the international price of crude oil — and set the benchmark for all economies to compare one another with.
What were the main takeaways from the WEO in October?
The central message was that the global economic recovery momentum had weakened a tad, thanks largely to the pandemic-induced supply disruptions. But more than just the marginal headline numbers for global growth, it is the increasing inequality among nations that IMF was most concerned about.
“The dangerous divergence in economic prospects across countries remains a major concern. Aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed it by 0.9 per cent in 2024. By contrast, aggregate output for the emerging market and developing economy group (excluding China) is expected to remain 5.5 per cent below the pre-pandemic forecast in 2024, resulting in a larger setback to improvements in their living standards,” it stated.
There are two key reasons for the economic divergences: large disparities in vaccine access, and differences in policy support.
But possibly the most important takeaway from the WEO this time is about the employment growth likely to lag the output recovery (Chart 1).
“Employment around the world remains below its pre-pandemic levels, reflecting a mix of negative output gaps, worker fears of on-the-job infection in contact-intensive occupations, childcare constraints, labor demand changes as automation picks up in some sectors, replacement income through furlough schemes or unemployment benefits helping to cushion income losses, and frictions in job searches and matching,” the IMF stated.
Within this overall theme, what is particularly worrisome is that this gap between recovery in output and employment is likely to be larger in emerging markets and developing economies than in advanced economies. Further, young and low-skilled workers are likely to be worse off than prime-age and high-skilled workers, respectively.
What does this mean for India?
As far as GDP is concerned, India’s growth rate hasn’t been tweaked for the worse. In fact, beyond the IMF, several high-frequency indicators have suggested that India’s economic recovery is gaining ground.
But what the IMF has projected on employment — that the recovery in unemployment is lagging the recovery in output (or GDP) — matters immensely for India.
To begin with, according to the data available with the Centre for Monitoring Indian Economy (CMIE), the total number of employed people in the Indian economy as of May-August 2021 was 394 million — 11 million below the level set in May-August 2019. To puts these numbers in a larger perspective, in May-August 2016 the number of employed people was 408 million. In other words, India was already facing a deep employment crisis before the Covid crisis, and it became much worse after it.
As such, projections of an employment recovery lagging behind output recovery could mean large swathes of the population being excluded from the GDP growth and its benefits. Lack of adequate employment levels would drag down overall demand and thus stifle India’s growth momentum.
Why could employment lag output growth in India?
There are several possible reasons. For one, as mentioned above, India already had a massive unemployment crisis. Labour economists such as Santosh Mehrotra, who is Visiting Professor at the Centre for Development Studies, University of Bath (UK), cite a number of additional issues.
“The first thing to understand is that India is witnessing a K-shaped recovery. That means different sectors are recovering at significantly different rates. And this holds not just for the divergence between the organised sector and unorganised sector, but also within the organised sector,” Mehrotra said. He pointed out that some sectors such as the IT-services sectors have been practically unaffected by Covid, while e-commerce industry is doing “brilliantly”. But at the same time, many contact-based services, which can create many more jobs, are not seeing a similar bounce-back. Similarly, listed firms have recovered much better than unlisted firms.
The second big reason for worry is that the bulk of India’s employment is in the informal or unorganised sectors (Table 2). The informal worker is defined as “a worker with no written contract, paid leave, health benefits or social security”. The organised sector refers to firms that are registered. Typically, it is expected that organised sector firms will provide formal employment.
So, a weak recovery for the informal/unorganised sectors implies a drag on the economy’s ability to create new jobs or revive old ones.
Last week, IMF Chief Economist Gita Gopinath pointed out that the number of people using the Mahatma Gandhi National Rural Employment Guarantee Act provisions was still 50-60% above pre-pandemic level. This suggests that the informal economy is struggling to recover at the same pace as some of the more visible sectors.
How informal is India’s economy?
Table 3, sourced from the 2019 paper ‘Measuring Informal Economy in India’ (S V Ramana Murthy, National Statistical Office), gives a detailed breakup. It shows two things. One, the share of different sectors of the economy in the overall Gross Value Added (GVA or a measure of overall output from the supply side just as GDP is from the demand side). Two, the share of the unorganised sector therein. The share of informal/unorganised sector GVA is more than 50% at the all-India level, and is even higher in certain sectors, notably those that create a lot of low-skilled jobs such as construction and trade, repair, accommodation, and food services. This is why India is more vulnerable.
Source: The Indian Express
8. Electronics maker Foxconn’s electric vehicles plan
Relevant for GS Prelims
Taiwanese electronics manufacturer Foxconn has unveiled three white-label electric vehicles in an effort to showcase its capabilities at a time when global smartphone makers like Apple and Xiaomi — which are Foxconn’s customers — have been working on coming out with their own EV models.
Foxconn Technology Group, which is the world’s biggest contract manufacturer for electronics, unveiled three prototype electric vehicles on Monday (October 18).
The unveiling is being billed as Foxconn’s pitch to invite global vehicle original equipment manufacturers (OEMs) showcasing the company’s manufacturing capabilities in the EV segment.
The sedans and SUV unveiled by Foxconn will be built for the company’s customers in the automotive segment instead of being sold under its own brand.
Vehicle manufacturing plans
The company announced that Taiwan’s Yulon Motors will be its first customer for electric vehicles manufacturing, but Foxconn’s plans to enter vehicle manufacturing have been in the works.
Last month, the company agreed to an automotive manufacturing plant in Ohio from ailing startup Lordstown Motors for $230 million — giving it a booster shot in the areas of automobile assembly capacity, equipment and talent. The plant was previously run by General Motors.
According to Reuters, this follows plans to build another manufacturing facility in Thailand as well as a chipmaking plant in Taiwan. The aim is to be able to service auto customers and partners, which already include US-based Fisker and China’s Geely, closer to their end users.
Timing of announcement
One of Foxconn’s biggest customers — iPhone maker Apple — has been secretly working on an autonomous automotive project codenamed Project Titan.
Apple is yet to formally announce the project or even decide on a manufacturing partner — however, CEO Tim Cook has hinted earlier that the company has been working on autonomy as a core technology.
Additionally, Chinese smartphone company Xiaomi Corp CEO Lei Jun announced on Tuesday that the company will mass-produce its own cars in the first half of 2024. In March, Xiaomi had said it would commit to investing $10 billion in a new electric car division over the next ten years.
And even though the company has announced its intent formally to get into EVs, like Apple, it is yet to reveal if it will produce the car independently or via partnership with a manufacturer.
Source: The Indian Express