TAIPEI (Taiwan News) — Taiwan’s Foxconn is closing in on a deal to produce electric vehicles for Japan's Mitsubishi Motors, reports said Thursday.

Foxconn Chair Young Liu (劉揚偉) sees working with Mitsubishi as a way to demonstrate the company’s EV capabilities, per Nikkei Asia. He said it also paves the way for collaboration with additional automakers.

Securing Mitsubishi as a client would represent a major accomplishment for the Taiwanese electronics manufacturer, the report said. Foxconn has sought to enter the EV industry to drive its future growth and lower its dependence on the consumer electronics business.

Under the deal, Mitsubishi, with its strong Southeast Asian market presence, would sell Foxconn-produced cars under its own EV brand. The models have yet to be finalized, reported Kyodo. 

The deal is expected to cut production costs for Mitsubishi, allowing the carmaker to focus more money on technology development.

Meanwhile, Foxconn’s journey into the EV market has been challenging amid Chinese competition. Its collaborations with auto startups did not yield positive results, and PTT Group lowered its stake in a joint EV venture.

Foxconn has partnered with Taiwan's Yulong Motor to introduce EV models. Its electric buses hit Taiwanese streets in 2022, and its Model C passenger car design will be produced in North America this year. 

However, Liu said the company would not be able to achieve its goal of a 5% global EV market share by this year.