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Foxconn is ready to gain a substantial share from the demand for the Electric Vehicles

In an agreement that could mark a major gamble by iPhone assembler on automobile manufacturing market, Foxconn Technology, Beijing-Apple supplier signed a strategic partnership agreement with troubled Chinese EV start-up Byton. As per a released statement, the firms, funded by Nanjing Economic and Technological Development Zone, plan to launch commercial production of Byton M-Byte by 2022’s first quarter. An individual familiar with the situation stated earlier, Foxconn, whose key listed arm is Hon Hai Precision Sector, plans to spend around $200 m in the company, refusing to be named disclosing details that are not yet available.

For Byton, that is struggling to manufacture its first product; the deal could constitute a lifeline, having launched its M-Byte concept car many years earlier. Under the deal, Foxconn will provide Byton with its advanced engineering technologies, experience in operation management and services for the supply chain. However, the Taiwan-based firm is still talking about future partnerships with several other Chinese electric-car manufacturers, another source familiar with the situation stated. Increasingly, tech firms are investing billions on designing cars of the next generation, such as all-electric cars and the smart technology that goes with them, like automated driving and connectivity networks for car-to-car.

Foxconn also aims to diversify a sector that relies on half its sales from the US mobile giant. In the early 2020, Hon Hai said a decision to create a joint venture to build and manufacture electric cars in China with the Fiat Chrysler Cars, although it would not be engaged in any assembly itself. The Taiwanese group launched its first electric car chassis in the month of October, as well as an open tech framework that seeks to help manufacturers of electric vehicles bring models closer to the consumer. In April, it will begin delivering its first developer pack. The Foxconn group also supplied other large carmakers, including Tesla, with components.

“In the first section of 2021, the electric car-related business will be very nice,” Hon Hai chairman Young Liu stated at a firm event in Taipei in December. The stocks of Hon Hai moved higher 8.6%, their highest one-day leap since April 2019. Last week, analysts at JPMorgan as well as Wedbush had also expected substantial iPhone revenues. Byton, another of the Chinese electric car start-ups with the highest visibility, had a rough 2020. Since the coronavirus outbreak made it challenging to get its company off the ground, it halted all domestic activities and laid off some workers in July.

The suspension is now being extended to June. Even before Covid-19 pandemic, the company had faced difficulties meeting reported targets for the first version to be manufactured and shipped. The company’s website is also taking car reservations. Byton, initially called Future Mobility Company, was founded by former BMW executives and had about 1,000 workers as of June in China and some 500 abroad, like the U.S.

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