TOKYO, May 7, 2025 (BSS/AFP) - The EV unit of Taiwanese technology giant Foxconn has agreed in principle to develop and supply an electric vehicle model to Japan's Mitsubishi Motors, the companies said Wednesday.

It marks Foxconn's first major contract in the fast-growing EV sector, and comes as analysts say many Japanese automakers will need to seek alternative partners to stay competitive as cars become more high-tech.

Mitsubishi Motors and Foxtron Vehicle Technologies said they had signed a memorandum of understanding and would "proceed with discussions towards a definitive agreement".

"The EV model to be supplied to Mitsubishi Motors... will be developed by Foxtron, manufactured in Taiwan by Yulon Motor Co., Ltd, and introduced in the Oceania region (Australia and New Zealand) in the second half of 2026," they said.

The model's "excellent driving performance and infotainment functions as an electric vehicle make it ideal for the region", their statement added.

Foxconn -- also known as Hon Hai -- is the world's largest contract electronics manufacturer and builds devices for major tech companies, including Apple's iPhones.

It has recently been pushing into areas ranging from electric vehicles to semiconductors and servers.

Foxconn said in February it was open to buying Renault's stake in Japan's Nissan.

Experts also say Honda, whose merger talks with Nissan fell through in February, could also be a good candidate for a Foxconn tie-up as it has technologies Honda wants.

Honda and Nissan's failed merger had been seen as a way for the auto giants to catch up with Chinese rivals on electric vehicles.

China's highly competitive EV market is the largest in the world, led by Shenzhen-based carmaker BYD which is accelerating its overseas expansion.