Due Diligence
Foxconn to make electric SUVs with start-up Byton
Reuters - Global Times - 07 Jan, 2021
Young Liu, chairman of Foxconn, said in the statement that the partnership with Byton will be a key part in Foxconn's strategy in the electric vehicle (EV) industry.
Foxconn's deal with Byton, its most concrete foray into the auto sector, amplifies the threat to established automakers that technology companies such as iPhone maker Apple and other non-traditional players could use contract assemblers as a shortcut to competing in the vehicle market.
By lowering manufacturing and the associated capital costs as a barrier to entry, contract assemblers could enable technology companies to focus on software and digital connectivity features that will define automotive competition in the coming years.
On Monday, Canadian auto supplier and contract assembler Magna International Inc expanded its alliance with US electric vehicle start-up Fisker Inc.
The company last year announced plans to set up a joint venture with Fiat Chrysler to build electric cars and develop internet-connected vehicles in China. It has not made major announcement on the partnership since then. Foxconn said in October it aimed to provide components or services to 10 percent of the world's EVs by between 2025 and 2027.
Byton, which is backed by state-owned automaker FAW Group and battery supplier Contemporary Amperex Technology Co Ltd, suspended production from July to conduct a reorganization of the firm due to the impact of the COVID-19 pandemic.
Some core staff continued to maintain basic operations, while the rest temporarily awaited job reassignment, according to the company's statement in July.
Byton was launched in September 2017 by Future Mobility Corp, a company co-founded by former BMW and Nissan Motor executives, and also has software and design facilities in the US and Germany.
Bloomberg reported on Monday that Foxconn's listed company Hon Hai Precision Industry Co plans to invest $200 million in Byton, citing an unidentified person familiar with the matter.
Young Liu, chairman of Foxconn, said in the statement that the partnership with Byton will be a key part in Foxconn's strategy in the electric vehicle (EV) industry.
Foxconn's deal with Byton, its most concrete foray into the auto sector, amplifies the threat to established automakers that technology companies such as iPhone maker Apple and other non-traditional players could use contract assemblers as a shortcut to competing in the vehicle market.
By lowering manufacturing and the associated capital costs as a barrier to entry, contract assemblers could enable technology companies to focus on software and digital connectivity features that will define automotive competition in the coming years.
On Monday, Canadian auto supplier and contract assembler Magna International Inc expanded its alliance with US electric vehicle start-up Fisker Inc.
The company last year announced plans to set up a joint venture with Fiat Chrysler to build electric cars and develop internet-connected vehicles in China. It has not made major announcement on the partnership since then. Foxconn said in October it aimed to provide components or services to 10 percent of the world's EVs by between 2025 and 2027.
Byton, which is backed by state-owned automaker FAW Group and battery supplier Contemporary Amperex Technology Co Ltd, suspended production from July to conduct a reorganization of the firm due to the impact of the COVID-19 pandemic.
Some core staff continued to maintain basic operations, while the rest temporarily awaited job reassignment, according to the company's statement in July.
Byton was launched in September 2017 by Future Mobility Corp, a company co-founded by former BMW and Nissan Motor executives, and also has software and design facilities in the US and Germany.
Bloomberg reported on Monday that Foxconn's listed company Hon Hai Precision Industry Co plans to invest $200 million in Byton, citing an unidentified person familiar with the matter.