On October 16, 2026, Foxconn (Hon Hai Precision Industry) signed a definitive agreement to acquire, through an investment company under its umbrella, 50% of the shares of Mitsubishi Electric Mobility, the company that runs Mitsubishi Electric's automotive equipment business. The expected acquisition price is ¥115 billion. After the deal closes, the business will be operated as a joint venture owned equally by Mitsubishi Electric and Foxconn. The capital tie-up, which began as a study in April, has now become a formal contract.
The partnership aims to combine Foxconn's EV development and manufacturing know-how with Mitsubishi Electric's electronic control technology and software. However, the scope is not limited to EV-related operations. It also includes the existing internal combustion engine-related business. The business plan released on October 19 shows a policy of pursuing growth in EV-related operations while also working to improve profitability in existing businesses.
What the ¥115 Billion Buys
The buyer of the shares is Lin Yin International Investment, a wholly owned Foxconn entity. Mitsubishi Electric will keep the remaining 50% and operate the business jointly with Foxconn. According to the announcement of October 16, the share transfer is expected to be completed in October 2027, subject to conditions such as approval from competition authorities. That leaves about a year between signing the contract and the start of joint operations.
The ¥115 billion price is not simply half of the business's enterprise value. The contract sets the enterprise value at ¥320 billion, while the equity value, which takes into account factors such as changes in assets, is calculated at ¥230 billion. The ¥115 billion Foxconn will pay equals 50% of that equity value. Distinguishing among enterprise value, equity value, and the actual acquisition price is key to understanding this deal.
The scope of the business being acquired also needs attention. Mitsubishi Electric Mobility was launched in April 2024, but not all of Mitsubishi Electric's automotive equipment business has been consolidated into it. Before the share transfer, the plan is to have the relevant businesses that remain within Mitsubishi Electric itself transferred to the company through a corporate split, and to move the relevant businesses held by domestic and overseas group companies to Mitsubishi Electric Mobility or its subsidiaries.
This difference shows up in the revenue figures. According to the timely disclosure documents, Mitsubishi Electric Mobility's revenue for the fiscal year ended March 2026 was ¥657.565 billion, while the revenue of the entire automotive equipment business subject to transfer was ¥875.6 billion. Because the two figures cover different scopes, viewing the deal as simply splitting the shares of a company with ¥657.565 billion in revenue would misjudge the actual size of the business.
The memorandum signed on April 24 was at a stage of considering joint operations with a view to accepting a 50% investment from Foxconn. The definitive agreement fixes the stake and price, and also sets out the concrete steps of consolidating the target businesses before transferring the shares. The idea of jointly developing an EV platform has thus advanced into a concrete plan involving a capital relationship and a restructuring of the business setup.
Foxconn Wants Vehicle Control Technology and Software
In its presentation materials of October 19, Foxconn cited electronic control technology, abundant software assets, and technologies related to advanced driver-assistance systems (ADAS) and software-defined vehicles (SDV) as reasons for partnering with Mitsubishi Electric Mobility. What Foxconn is seeking is not mere auto parts production capacity but technology that controls vehicle functions and behavior. For Foxconn, which develops and manufactures EVs, strengthening vehicle control technology and software is important to improving its ability to develop complete vehicles.
The two companies plan to center their collaboration on three areas: electric powertrains, autonomous driving, and in-vehicle intelligence. In electric powertrains, they intend to use technologies such as inverters, and in in-vehicle intelligence, to draw on vehicle control software. Driver monitoring technology, which detects the driver's condition, is also positioned as one of the technologies to be used in future collaboration.
Mitsubishi Electric's strengths are not limited to these technologies. Its business sites around the world and its existing relationships with automakers are also important assets. Foxconn, for its part, plans to use its purchasing power and development speed to build a Japan-born EV platform together with Mitsubishi Electric. By developing everything from the basic vehicle structure to electronic control systems and software in an integrated way, the companies hope to strengthen the competitiveness of their EV business.
However, what has been presented at this stage is a future development concept that combines the two companies' technologies and business foundations. Signing the investment contract has not settled the number of new EV orders or the level of autonomous driving performance. Several stages remain before jointly developed technology is adopted in actual vehicles and leads to mass production and sales, including product development and customers' adoption decisions.
Mitsubishi Electric Mobility will also not become a company that handles only EV-related operations. At the briefing, the companies presented four pillars for the future: electrification-related products, driver monitoring, electric power steering, and new mobility businesses and services. In addition, the company will continue its internal combustion engine-related business and plans to nurture a solutions business that uses mobility-related data. The business structure is meant to grow new EV-related operations while also continuing to supply existing products and secure profits.
A ¥1 Trillion Revenue Target for FY2030, With Existing Business Profitability the Key
The roadmap on page 20 of the October 19 briefing materials projects revenue for the automotive equipment business of ¥820 billion in fiscal 2026, compared with the fiscal 2025 result of ¥875.6 billion. The plan then aims for more than ¥1 trillion in fiscal 2030. The policy shown is to improve the profitability of existing businesses and lead that to future growth, even as revenue is expected to fall temporarily.
| Metric | FY2025 actual | FY2026 forecast | FY2030 target |
|---|---|---|---|
| Revenue | ¥875.6 billion | ¥820 billion | Over ¥1 trillion |
| Adjusted operating margin | 5.7% | 9.3% | Not stated |
According to the same materials, revenue is expected to decline in fiscal 2026, while the adjusted operating margin is projected to improve from 5.7% in fiscal 2025 to 9.3%. Note that the adjusted operating margin is the company's own adjusted metric and cannot be equated with the ordinary operating margin. Growth in revenue and improvement in profitability do not necessarily go together, so they must be evaluated separately.
What matters here is that the fiscal 2026 margin improvement was planned before joint operations with Foxconn begin. Fiscal 2026 ends in March 2027, while the share transfer is scheduled for October of that year. The expected margin improvement in fiscal 2026 therefore cannot be evaluated as a result of joint operations as a joint venture. The briefing materials also position the "earning power of existing businesses" as the foundation for growth and include the wind-down of unprofitable businesses and profitability improvements in key businesses in the roadmap.
In other words, to assess the fiscal 2030 target of more than ¥1 trillion in revenue, one must distinguish between the business structural reforms Mitsubishi Electric has pursued all along and the new growth generated by the partnership with Foxconn. Besides how far the profitability of existing businesses improves, how much the jointly developed products boost revenue will be an important factor in judging whether the target is achieved.
What to Watch: Adoption and Mass Production of Jointly Developed Products
In connection with this share transfer, Mitsubishi Electric expects to book an impairment loss of about ¥100 billion in the fiscal year ending March 2027. It is continuing to examine other effects and plans to announce its consolidated earnings forecast for that fiscal year on October 30. While future growth from the partnership is anticipated, the effects on asset valuation and short-term results are also becoming clear.
After the share transfer, Mitsubishi Electric Mobility is expected to cease to be a consolidated subsidiary of Mitsubishi Electric from the fiscal year ending March 2028 and become an equity-method affiliate. This will make it harder to track the growth of the jointly operated automotive equipment business from changes in Mitsubishi Electric's consolidated revenue alone. Going forward, it will be necessary to keep checking the business's own revenue and margins, as well as the adoption and mass-production progress of jointly developed products.
Although the two companies speak of developing a Japan-born EV platform, the roadmap showing the fiscal 2030 revenue target does not break down how much new EV-related products will contribute to revenue. Once it becomes clear which vehicle models will adopt the jointly developed products, when mass production will begin, and how much revenue they will generate, the business impact of the ¥115 billion investment can be evaluated concretely. Whether the companies can turn their collaboration into actual orders and mass production while improving the profitability of existing businesses will determine the success of this partnership.