A Byton M-Byte SUV is shown at the CES 2020 event in Las Vegas, Nevada, USA, on Sunday, January 5, 2020.
Bridget Bennett Bloomberg | Getty Images
GUANGZHOU, China – Apple iPhone maker Foxconn has signed an agreement with Chinese electric vehicle maker Byton to help produce its first vehicle.
The decision marks a big boost for Foxconn towards car manufacturing as it tries to diversify its business beyond assembling consumer electrical products.
Foxconn, which trades with Hon Hai Precision Industry Co. in Taiwan, it saw its shares jump above 4% on Tuesday after closing 8% higher on Monday.
Byton, Foxconn and Nanjing Development Zone on Monday signed a strategic cooperation framework agreement to jointly produce Byton’s M-Byte SUV in the first quarter of 2022.
Foxconn will provide its experience in advanced manufacturing technology, operational management experience and share industry resources, according to a corporate statement.
The deal could provide a lifeline to Byton, which unveiled the M-Byte for the first time in 2018, but has since struggled to increase production. The China-based Nanjing company had to suspend production in July and undergo a reorganization after the coronavirus pandemic hurt the business.
For Foxconn, the deal is a way to diversify its business. Last year, Foxconn launched a set of tools that would allow a company to design large parts of an electric car that would be manufactured by the Taiwanese firm. These tools include a chassis and software for the vehicle.
Foxconn has already been supplying car manufacturers, including Tesla, with specific components.
China’s electric vehicle market continues to show strong growth. Nio, Li Auto and Xpeng, the companies that started electric cars, announced in recent days that deliveries increased in 2020 to close the year with new monthly highs.