Foxconn’s EV project with China’s Byton Halted: Report

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  • Three people said that Byton’s debt issues and its complex shareholder structure, which involves Chinese local governments, created far more difficulties than Foxconn expected
  • One of the people with direct knowledge of the matter told Nikkei Asia that the project is not officially terminated yet, but it is very challenging to proceed at this moment

As per a report by Nikkei Asia, Foxconn’s electric vehicle collaboration with Chinese startup Byton has been put on hold due to the latter’s worsening financial situation. In January, Foxconn announced that it would Byton bring its first-ever EV to mass production by the first quarter of 2022. The report added that multiple people familiar with the matter said that the project was halted after less than six months and that the Taiwanese company has since shifted its focus to other ongoing EV projects, such as a joint venture with Thai oil and gas company PTT.

One of the people with direct knowledge of the matter told Nikkei Asia that the project is not officially terminated yet, but it is very challenging to proceed at this moment. Another source had communicated that a fewFoxconn employees are still stationed at Byton’s factory, another source said, but they are wrapping things up and preparing for the end when it becomes necessary.Some higher-level talent involved in the project has even left Foxconn, the person added.

Three people said that Byton’s debt issues and its complex shareholder structure, which involves Chinese local governments, created far more difficulties than Foxconn expected.

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In July, Bloomberg had reported that the collaboration was affected after one of Byton’s largest creditors took management control of the startup, and that Foxconn pulled out some of its personnel from the project.The joint project was overseen directly by Foxconn Chairman Young LiuLiu, who took over as chairman from founder Terry Gou two years ago, vowed to have Foxconn’s designs, components, mechanical parts or software inside five per cent of the world’s EVs by 2025.

The report added that the sources said that any financial impact from halting the project is likely to be small. The company had sent employees and invested administrative resources in the project since January, but had not yet purchased production equipment before it was paused around the end of the June quarter. One of the people said that if it is later canceled, the financial damage would be considered very marginal, as the company has not yet invested big money into the project.

 

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