I’ve been tracking Foxconn’s EV strategy since they first announced their ambitions to become the “Android of electric vehicles.” So when I saw the news that their joint venture Foxtron is acquiring Taiwan’s Luxgen brand for just $25 million, my first thought was: this doesn’t add up. Not because the deal doesn’t make sense, but because it directly contradicts what Foxconn’s chairman said just one month ago.

Here’s what you need to know:

What: Foxtron Vehicle Technologies is acquiring 100% of Yulon Motor’s Luxgen brand for T$787.6 million ($24.95 million)
Who: Foxtron is the EV joint venture between Foxconn (45.6% stake) and Yulon Motor (43.8% stake)
When: Deal expected to close Q1 2026 after Taiwan Fair Trade Commission approval
What’s included: Five sales subsidiaries, 22 showrooms, 25 service centers, and approximately 600 employees

The announcement, reported by Reuters, comes as Foxtron prepares to launch its “Model B” electric vehicle in Taiwan under the new “Foxtron Bria” name.

The Contradiction Nobody’s Talking About

Here’s what makes this deal fascinating. Just last month, Foxconn Chairman Young Liu made headlines by announcing the company was pivoting hard away from EVs toward artificial intelligence. He predicted China’s EV market would experience a devastating “shakeout” that would crush unprofitable manufacturers.

“They’re not making money,” Liu said of Chinese EV makers during an interview with Reuters in November, adding that government subsidies were too limited to support every manufacturer.

Foxconn announced plans to invest $2 billion to $3 billion annually in AI infrastructure over the next three to five years. The company even delayed its ambitious target to capture 5% of the global EV market by 2025.

So why is their EV joint venture now acquiring a car brand that has posted losses for years?

It’s Not About the Cars

The answer lies in what Foxconn actually wants from this deal: infrastructure, not vehicles.

Luxgen operates more than 20 locations across Taiwan with a complete service network. According to CommonWealth Magazine reporting, the brand has 22 showrooms, 25 service centers, and roughly 600 frontline staff. For a contract manufacturer trying to serve “non-traditional carmaker customers,” that’s gold.

Consider Foxtron’s business model, which they call Contract Design and Manufacturing Service (CDMS). Think of it as the iPhone manufacturing model applied to cars. Foxtron designs and builds the vehicles; partner companies handle sales and marketing. But here’s the catch: someone still needs to service those vehicles after the sale.

That’s exactly what Luxgen provides.

Foxtron already has a deal with Mitsubishi Motors to supply EVs for the Oceania region in the second half of 2026. They’re also in talks to bring the Foxtron Model C to the United States, where it would be sold under a mystery brand (the Model C is already sold in Taiwan as the Luxgen N7). Having a proven sales and service operation in-house makes Foxtron a more attractive partner for brands that don’t want to build their own EV infrastructure from scratch.

The Luxgen Paradox: From Bestseller to Bailout

The trajectory of Luxgen’s N7 tells the story of Taiwan’s EV market challenges.

When the N7 launched in 2024, it was a genuine success. The vehicle racked up 25,000 preorders and became the first affordable EV option for Taiwanese buyers at around NT$1 million (approximately $33,450). Monthly sales regularly exceeded 1,000 units, making it the second-best-selling EV in Taiwan behind only Tesla’s Model Y.

Then the bottom fell out.

By late 2025, N7 monthly sales had collapsed to under 300 units. Gasoline-powered Luxgen vehicles dropped to under 30 units per month. Taiwan’s overall EV market saw registrations decline sharply, with May 2025 down 64.6% year-over-year.

The broader numbers are sobering. Luxgen has invested over NT$100 billion (approximately $3.2 billion) since the brand’s founding in 2009. Foxtron itself has accumulated losses of NT$3.4 billion (around $108 million). A former Yulon executive told CommonWealth Magazine: “If we keep burning cash, Yulon won’t survive.”

What This Means for Foxconn’s US Plans

Foxconn has been telegraphing its US market ambitions for months. They acquired the former Lordstown Motors plant in Ohio, they’ve shown off vehicles designed by Pininfarina, and executives have confirmed they have a US client ready to sell the Model C later this year.

The Luxgen acquisition signals that Foxconn understands what many EV startups learned the hard way: building cars is only half the battle. Selling them and servicing them is where the real complexity lives.

Fisker, Lordstown Motors, and countless others had products they couldn’t deliver or service at scale. By absorbing Luxgen’s retail operations, Foxconn is building something most contract manufacturers lack: end-to-end operational experience.

EVXL’s Take

Here’s what I expect: Foxconn’s apparent contradiction, pivoting to AI while acquiring an EV brand, actually makes strategic sense when you understand the CDMS model. They’re not buying Luxgen to sell Luxgen cars. They’re buying the infrastructure needed to make contract manufacturing viable.

The $25 million price tag is remarkable for what it includes. For context, that’s roughly what some EV startups spend on a single Super Bowl commercial. Foxconn is getting a complete retail operation, a brand with national recognition in Taiwan, and institutional knowledge about selling and servicing EVs.

This connects directly to our November coverage of Foxconn’s AI pivot. Chairman Liu predicted an EV shakeout would eliminate unprofitable players. He never said Foxconn was abandoning EVs; he said they were waiting for market conditions to improve before ramping investment.

Acquiring a distressed brand at fire-sale prices while picking up essential retail infrastructure? That’s exactly the opportunistic move you’d expect from a company positioning itself as the Magna Steyr of EVs.

For prospective EV buyers watching Foxconn’s US plans, this deal answers an important question: who’s going to service your vehicle when the brand selling it is just a marketing company? Foxconn now has the operational playbook to offer that capability to partners.

The shakeout Liu predicted is happening. Foxconn is positioning to be a consolidator, not a casualty.

Are you following Foxconn’s EV strategy? Do you think contract manufacturing is the future of the automotive industry? Let us know in the comments.