Mitsubishi Electric is evaluating a partial stake sale in its automotive components subsidiary, Mitsubishi Electric Mobility, as reports emerge of potential investment discussions with Taiwan's Foxconn.
The company confirmed on March 18 that it is "examining the possibility of transferring a portion of its stake" in the Tokyo-based unit, weighing whether such a move would enhance business value and whether a transaction is feasible, according to Nikkei. Reports that it may accept capital from Foxconn were "not announced by the company," it said, adding that it would "promptly disclose" any material developments.
Shifting gears: Foxconn bets on Mitsubishi
Foxconn has been tightening its relationship with the Mitsubishi group as it races to build out an EV supply chain — first signing vehicle supply agreements with Mitsubishi Motors, then opening investment talks with Mitsubishi Electric's automotive arm.
The company, best known as the contract manufacturer behind Apple's iPhone and AI servers, has positioned EVs as a core growth pillar since entering the sector in 2019. It has since launched buses and passenger vehicles in Taiwan, while pursuing deals across Japan, the US, and Europe under its contract design and manufacturing service (CDMS) model — an integrated offering spanning design, manufacturing, and sales.
Foxconn chairman Young Liu said in a November 2025 interview that all of Japan's top 10 automakers are potential partners, singling out the country's sluggish EV adoption as an opportunity.
From handshake to joint venture
Foxconn's relationship with the Mitsubishi group has moved fast. It signed a memorandum of understanding with Mitsubishi Motors in May 2025 to supply vehicles, with Foxconn-developed EVs earmarked for launch in Oceania in the second half of 2026. By January 2026, the company had also struck a joint venture with Mitsubishi Fuso Truck and Bus — a Daimler Truck unit — to produce EV buses at a plant in Toyama, Japan.
With those deals in place, Foxconn turned its attention to Mitsubishi Electric Mobility. No final decision has been made, but the companies are exploring a structure in which Foxconn would take a 50% stake and co-operate the business alongside Mitsubishi Electric. The appeal is clear: Mitsubishi Electric Mobility holds expertise in alternators and starters, and is developing critical EV drivetrain components such as inverters and motors — exactly the in-house capabilities Foxconn is looking to acquire.
Driving toward a deal
Mitsubishi Electric is in active talks with Foxconn over an equal-investment, joint-operation structure for Mitsubishi Electric Mobility, with both sides targeting an agreement by May 2026, according to Nikkei. One source described the potential deal as one that "would be a win-win if realized."
In a statement on March 17, Mitsubishi Electric said it is "promoting a business portfolio strategy that considers all options," including transferring part of its stake to strategic operators or private equity funds. The evaluation centers on maximizing shareholder value, improving the long-term prospects of its automotive equipment business, and ensuring any deal is executed swiftly and reliably.
The company has been weighing external partnerships since spinning out Mitsubishi Electric Mobility. After exploring options ranging from an outright sale to gauging interest from industry peers and investment funds, it has concluded that accepting outside capital and pursuing joint operations is preferable to a full divestiture — provided the "Mitsubishi" name is retained.
For Foxconn, a successful deal would mean access to Mitsubishi Electric's production infrastructure and distribution network, potentially expanding component supply to automakers in Japan and beyond.
Mitsubishi Electric said it will "promptly disclose" any developments that require public announcement.
Article edited by Jerry Chen
