Taiwanese contract manufacturer Foxconn has suspended its plans to cooperate with the struggling Chinese electric car start-up Byton. Insiders say this is due to Byton’s deteriorating financial situation.
In January this year, both companies had announced that Foxconn would support Byton in bringing the M-Byte into series production by the first quarter of 2022. Byton had already started pre-series production of the M-Byte in October 2019 and was on its way to series production. The fragile timetable faltered in the wake of the Corona pandemic when promised funds did were not forthcoming. In July 2020, the company temporarily ceased operations. The cooperation with Foxconn and the associated investment was seen as a lifeline for Byton’s plans.
According to a report from Nikkei, the cooperation is apparently about to come to an end. The business publication cited several people familiar with the matter who have indicated that the project has been halted after less than six months. “The [Byton] project has not officially terminated yet, but it is very challenging to proceed at the moment,” one insider said. Instead, Foxconn has shifted its focus to other EV projects, such as the joint venture with Thai state-owned PTT, they said.
Another source – apparently also close to Foxconn – said that while a few Foxconn employees were still stationed at the Byton factory, “basically they are wrapping things up and preparing for the end when it becomes necessary.” Some high-ranking Foxconn employees who had been involved in the project had even left the company, they added.
In total, three sources told Nikkei that the debt problems and the complex structure among Byton’s shareholders had created far more difficulties than Foxconn had expected. In July, Bloomberg reported that Foxconn had withdrawn some of its staff after one of its Byton creditors had taken control of the management.
According to the insiders, the financial impact for Foxconn is likely to be small. Since the announcement of the cooperation, Foxconn has only sent staff and invested “administrative resources” in the project. No production equipment had been purchased before the project was paused at the end of June.
While the failure of the Byton project may be disappointing for Foxconn, the electronics producer has plenty of alternatives for furthering its foray into the electric vehicle business, such as its recently sealed collaboration PTT. The Thai oil and gas producer signed a joint venture deal with Foxconn this week, with which the partners intend to make Thailand Southeast Asia’s biggest EV producer.
Foxconn also has agreements with Fisker, Geely and Nidec, among others such as the now-giant Stellantis formed with FCA with whom Foxconn announced a planned joint venture in 2020. Foxconn also has plans to build factories in the USA, Thailand and possibly Europe. Byton, on the other hand, faces more serious consequences, looking unlikely to be able to keep to its Q1 2022 plan for series production without Foxconn.
– ADVERTISEMENT –