Asian Tech Press (Mar. 7) -- Hon Hai Precision said it would raise the company's overall gross margin to 10% with electric vehicle business.

According to Taiwan's Economic Daily News, Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, plans to rely on new businesses such as electric vehicles to reach the milestone of 10% gross margin in 2025.

With the shipment of the Model T e-bus, Foxconn's first electric vehicle, the expansion of downstream exports, and the further increase in the shipment of self-made components, will help Hon Hai reach the target of a 7% gross margin as soon as possible, and achieve the milestone of 10% gross margin in 2025.

Hon Hai Chairman Young Liu analyzed that the gross margin of manufacturing components is 20% to 30%, that of modules is 10%, and that of system assembly is less than 3%.

He stressed that in the future, the company will continue to increase the revenue of components to improve the gross margin.

Especially, Liu said that in order to raise the overall gross margin to 7%, Hon Hai has to rely on parts and digital transformation, while to raise it to 10%, the company needs to resort to new businesses such as electric vehicles.