Mitsubishi Electric Forms EV Partnership with Foxconn, Projects ¥80B Gain

Mitsubishi Electric has agreed to sell a 50% stake in its automotive equipment business to Hon Hai Precision Industry (Foxconn) for ¥115 billion, anticipating an approximately ¥80 billion gain in its fiscal year 2028, but also a ¥100 billion impairment loss in fiscal year 2027. The agreement, formalized through a stock purchase agreement on October 16, 2026, includes an asset transfer to Mitsubishi Electric Mobility, the company’s automotive equipment subsidiary.

The strategic partnership aims to bolster Mitsubishi Electric’s position within the rapidly expanding electric vehicle (EV) supply chain. Specifically, the collaboration is intended to leverage Mitsubishi Electric’s strengths in electric powertrain technologies and Foxconn’s scale and expertise in EV platform development. The company anticipates that this collaboration will contribute to the development of a 'Made in/by Japan' EV platform, contributing to the strengthening of Japan’s industrial base.

While the deal is expected to generate a substantial gain, Mitsubishi Electric also projects an impairment loss of approximately ¥100 billion in its consolidated financial statements for the fiscal year ending March 2027. This loss is attributed to the restructuring associated with the transfer of the automotive equipment business. The company is currently reassessing its consolidated financial forecast for fiscal year 2027, with a revised outlook expected to be released on October 30, 2026.

The partnership builds upon earlier collaborations with Foxconn, beginning with a memorandum of understanding in November 2025 concerning AI data center solutions, which subsequently expanded to include the automotive sector in April 2026. Mitsubishi Electric aims to achieve further growth through synergies with Foxconn, targeting a revenue scale of over ¥1 trillion for Mitsubishi Electric Mobility. The company’s strategy focuses on four key areas – electrified powertrain, automated driving, in-vehicle intelligence, and legacy internal combustion engine (ICE) related business – alongside expansion into solution-based services.

The financial impact of this transaction will be reflected in Mitsubishi Electric’s financial statements. The company anticipates recognizing the approximately ¥80 billion gain as special profit in its non-consolidated financial results for the fiscal year ending March 2028.