Foxconn Seals Manufacturing Deal With Chinese EV Startup Byton

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Apple Inc. supplier Foxconn Technology Group signed a strategic cooperation deal with embattled Chinese electric-vehicle startup Byton Ltd.in a transaction that could mark a large bet by the iPhone assembler on the car-making business.


The companies, aided by the Nanjing Economic and Technological Development Zone, aim to start mass production of the Byton M-Byte by the first quarter of 2022, according to a statement Monday. Foxconn, whose main listed arm is Hon Hai Precision Industry Co., plans to invest around $200 million in the venture, a person familiar with the matter said earlier, declining to be identified discussing information that isn’t yet public.

The deal could represent a lifeline for Byton, which is struggling to produce its first vehicle having unveiled its M-Byte concept car several years ago. Under the arrangement, Foxconn will supply Byton with its advanced manufacturing technology, operation management expertise and supply chain resources. The Taiwan-based company is however also talking to other Chinese electric-car makers on potential collaborations, another person familiar said.

Tech companies are increasingly pouring money into developing next-generation cars, including all-electric vehicles and the smart technologies that go with them like autonomous driving and car-to-car communication systems. Foxconn is the single most important production partner for Apple, which is reportedly considering developing a self-driving car of its own. Foxconn is also seeking to diversify a business that depends on the U.S. smartphone giant for half its revenue.

In early 2020, Hon Hai announced a plan to form a joint venture with Fiat Chrysler Automobiles NV to develop and make electric vehicles in China, though it won’t be involved in any assembly itself. In October, the Taiwanese company unveiled its first electric-vehicle chassis as well as an open software platform that’s aimed at helping EV makers deliver models to the market faster. It will start shipping its first developer kit in April. The Foxconn group has been supplying parts to other major carmakers including Tesla Inc.

“The electric vehicle-related business will be very good in the first half of 2021,” Hon Hai Chairman Young Liu said at a company event in Taipei last month.

Hon Hai’s shares closed up 8.6%, their biggest one-day jump since April 2019. Analysts at JPMorgan and Wedbush had also forecast robust iPhone sales last week.

Byton, one of the highest-profile Chinese EV startups, had a tough 2020. It suspended all domestic operations and furloughed staff in July after the coronavirus pandemic made it tougher to get its business off the ground. That suspension has been extended now until June. Even before Covid-19 the company had encountered difficulties meeting announced deadlines on producing and delivering its first model. The company’s website still accepts reservations for cars.

Founded by former BMW AG managers, Byton, initially named Future Mobility Corp., had about 1,000 employees in China as of June and about 500 elsewhere, including the U.S. Its investors include state-owned China FAW Group Corp. and EV battery maker Contemporary Amperex Technology Co. Ltd., which supplies batteries to Tesla.

Byton was planning to enter North America and Europe around mid-2020, former Chief Executive Officer Daniel Kirchert, also one of the company’s co-founders, said in early 2019. The company would consider an initial public offering after new financing and production begins, he said at the time.

The M-Byte SUV can reach 80% of full charge in about 35 minutes and has a top speed of 190 kilometers (118 miles) an hour. It has a range of up to 550 kilometers, according to specs on Byton’s website.



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SOURCE: BLOOMBERG HYPERDRIVE



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Foxconn's collaboration with Byton is the Apple supplier's latest bet on electric vehicles. (Source photos by Kosaku Mimura and Reuters)

LAULY LI, NIKKI SUN and CHENG TING-FANG, Nikkei staff writersJanuary 4, 2021 22:19 JST
TAIPEI/HONG KONG -- Key iPhone assembler Foxconn has made its latest bet on the growing electric vehicle industry by forging ties to struggling Chinese startup Byton.

As part of a deal announced on Monday, Foxconn will give supply chain management and operational support to Byton, helping it to get its production plans back on track after it suspended operations in July amid financial difficulties.

The agreement underlines Foxconn's desire to find new fields of growth beyond the maturing smartphone market, particularly its emphasis on the EV industry. The world's largest contract electronics manufacturer announced a joint venture with Fiat Chrysler Automobiles in January 2020 to make electric cars in China for the local market, but that partnership has been delayed until Fiat completes its merger with French rival Peugeot

Foxconn set up another EV joint venture with Taiwanese carmaker Yulon Motor last year. Yulon, nearly 70 years old, produces Nissan and Mitsubishi cars for Taiwan, and also has its own brand, Luxgen.

Foxconn described its latest move as a "strategic collaborative framework" between itself, Byton and the Nanjing Economic Technological Development Zone. The government of the city of Nanjing is one of Byton's lead investors.

The arrangement promises to provide much-needed relief for Byton, which has furloughed all its China employees and suspended operations since July after an attempt to secure new funds failed.

Founded in 2017 by two former BMW executives, Byton was once seen as one of the "four dragons," the most promising EV startups in China, alongside Xpeng Motors, Nio and Li Auto. The company raised $1.2 billion from investors including Tencent Holdings and FAW Group, one of China's oldest state-owned carmakers, as well as the Nanjing government.

It had planned to start mass producing its first model, the M-Byte SUV, at an 800,000 sq. meter factory in Nanjing last year, but it is now uncertain when that plan will go ahead. The company also has offices in Hong Kong, Germany and the U.S. state of California.

The company blamed the Covid-19 pandemic for its financing woes and in July embarked on a six-month restructuring plan to turn its business around.

As part of that plan FAW and Nanjing formed a new company in September with registered capital of 1.5 billion yuan to raise funds for the production of the M-Byte, local media reported.

Foxconn said that with its support, Byton will be able to "accelerate its plans to mass produce the M-byte by the first quarter of 2022."

For Foxconn, the agreement is part of a concerted effort to diversify its business. Chairman Young Liu, who took over from company founder Terry Gou in June 2019, has identified electric vehicles as one of the key growth drivers for the electronics-making giant, along with semiconductors, servers, key components, robotics, 5G connectivity and artificial intelligence.

The Apple supplier in October launched an EV software and hardware platform -- the MIH EV Open Platform -- and invited tech industry suppliers and automobile suppliers jointly to develop EV specifications so as better to tap the growing market.

Liu has said Foxconn, which formally trades as Hon Hai Precision Industry, is aiming to control up to 10% of the global market for electric vehicle platforms by 2025 as it seeks to counter the slowdown in the smartphone industry.

The platform alliance has already attracted more than 300 members, including Qualcomm, MediaTek, Arm Limited, STMicroelectronics and AWS.

Foxconn on Monday introduced the Hon Hai Research Institute in Taipei, the company's new R&D center for identifying emerging technological applications that have commercial promise. Liu said electric vehicles are a key area the R&D facility will focus on.

"I think there are definitely advantages for players like us in the information, computer, and tech industry to venture into the future electronics vehicle market," Liu told reporters at the launch of the research institute. "We have a great expertise in supply chain vertical integration and management. We also have built 30 years of capability in electronics engineering and a great pool of talent."

Traditional carmakers have the know-how for building cars but lack sophisticated supply chain management capability, the chairman said, while internet giants that wish to make EVs do not know how to make the necessary hardware.

Liu also said that the smartphone market is saturated and Foxconn must start looking for new sources of growth.

"With the mobile market mature, the industry only needs 70% of the engineering workforce to maintain those businesses. The remaining 30% of people could be tasked with looking for new growth opportunities."

"I think the tech players will have a big presence in the EV industry," he added.


SOURCE: Nikkei Asia
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Crissa

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Man, the second article is much better.

The first one makes it sound like they only make iPhone, but they make components that are in every PC, too, their assembly business just exploded as iPhone money over shadowed everything else.

They used to make every zif board integration ribbon in the world for awhile, a part that'll in almost every device.

-Crissa
 
 




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