'iPhone City' reborn as electric vehicle hub

Zhengzhou, China, was once known as the “iPhone City” when Apple chose to produce most of its smartphones. But in recent years, the city has gradually become deserted as the supply chain has changed, production lines have left China, and the “iPhone City” has gradually become deserted.

Now, Zhengzhou is undergoing a major transformation as BYD and other automakers build out their electric vehicle supply chains. Workers wearing “new hire” armbands are everywhere at a BYD factory. The company produced 200,000 vehicles at the plant in 2023, and that number is expected to double this year. On average, a new electric vehicle like the Song Pro SUV or the Sea Lion 07 sedan rolls off the assembly line every minute.

New generation cars are continuously being produced from Zhengzhou.

PHOTO: ITSURO FUJINO/NIKKEI

Zhengzhou is also attracting many electric vehicle manufacturers to invest and open factories. SAIC Motor’s 2 billion yuan ($277 million) battery factory has been operating since October. SAIC’s CEO said the company plans to turn Zhengzhou into an “electric vehicle manufacturing and export capital.”

Yutong Bus, a local company and leading bus manufacturer in China, is also moving into providing electric vehicle-related products.

Zhengzhou's "rebirth" after Apple's departure is part of the plan of the government and city officials. Nikkei Asia quoted An Wei, a senior city official, as saying that the local government has planned to turn Zhengzhou into China's largest electric vehicle production base from 2022. Research and development support policies based on the number of enterprises have been outlined with the aim of enhancing technology for batteries, motors and autonomous vehicles.

The BYD plant has increased the number of electric vehicles produced in Zhengzhou to about 320,000 by 2023, a threefold increase from the previous year. In a statement in September, Zhengzhou Mayor He Xiong said the city planned to produce more than 1.5 million electric vehicles by 2025. He also set a target of 60% locally produced components.

Electric cars become Zhengzhou's new hope

For years, Zhengzhou’s economy has relied heavily on iPhone assembly by Foxconn. The Taiwanese company arrived in the city in 2010, setting up its largest factory and assembling about 60% of all iPhones globally. But in 2023, the total number of iPhones shipped from Zhengzhou will be just 140 million, half of what it was in 2017. Part of the reason is the shift in supply chains, with Apple gradually moving production lines to India and neighboring countries.

"During peak season, we used to work three shifts a day, but now we only work two shifts," a worker at Foxconn told Nikkei Asia.

Inside the Foxconn Zhengzhou factory in 2021

PHOTO: GETTY SCREENSHOT

According to experts, the proportion of iPhones produced in India is still low but will quickly increase to 25% of total production in the next few years. Foxconn has announced plans to expand its factory in India and its subsidiaries are also planning to move out of China. Last month, Kuo Ming-Chi, an analyst at TF International Securities, said that Apple's order volume for iPhone 16 suppliers has been cut by 10 million units compared to the original.

At its peak, Foxconn Zhengzhou employed about 35,000 people. However, that number has been dwindling. In addition to orders being moved out of China, another reason is that automated machines have gradually replaced humans. Lack of orders and workers has gradually made "iPhone City" deserted, and about half of the 130 restaurants serving workers along the street near the factory have closed. Their revenue has dropped to a third of its peak from 2015 to 2017.

Now, electric vehicles are becoming the new hope of Zhengzhou. Earlier in mid-August, the New York Times quoted sources saying that Foxconn was also planning to build a new electric vehicle factory, right next to the iPhone assembly plant to catch up with the new trend. The company has already received the first orders from Luxgen, a company specializing in bus and car manufacturing. That shows that not only the city government, but also large enterprises in Zhengzhou are looking for ways to change and contribute to the city's revival.

Source: https://thanhnien.vn/thanh-pho-iphone-tai-sinh-thanh-trung-tam-xe-dien-185241116110507966.htm