Foxconn intends to invest US$200 million in Byton.

    On January 4, according to Bloomberg News, citing people familiar with the matter, Foxconn is negotiating with Byton and intends to invest in the latter. According to the person familiar with the matter, Foxconn intends to invest approximately US$200 million in mass production of Byton M-Byte models, starting in the first quarter of 2022. The relevant agreement statement is expected to be released as early as Monday.

    In this regard, Caijing.com Auto contacted Byton, and the relevant person in charge responded that it is temporarily inconvenient to comment on the rumors, but did not directly deny the news.

    According to Bai Yiyang, the research department of CMB International, from the perspective of Foxconn, there may be two development paths in the future. One is to use platforms and batteries as a Tier 1 supplier, and the other is to become a foundry in the automotive industry. Combined with Apple's recent actions, it is not excluded that Foxconn will cooperate with new forces such as Byton to accumulate OEM experience before Apple's mass production.

    From the perspective of Byton, Bai Yiyang pointed out that the current window for new forces is gradually closing. Foxconn's US$200 million investment is expected to last 1-2 quarters. The speed of mass production depends mainly on the completion of the reorganization at the organizational structure and other levels.

    Senior automotive analyst Ren Wanfu also said that the US$200 million investment is a drop in the bucket, and it is difficult to promote Byton's resumption of production in mainland China ahead of schedule.

    Byton has decided to extend the time for the resumption of work and production in Mainland China.

    On December 31, 2020, Byton sent an internal email to employees of the "Notice of Suspension of Production Suspension in China" to notify all companies in China (excluding Hong Kong) (hereinafter referred to as the "Company") that they still do not have the ability to resume work and resume production. Conditions, after research and decision, starting from January 1, 2021, the company will extend the shutdown period for 6 months, until June 30, 2021.

    Ren Wanfu said that Byton's further extension of the time to resume work and production should be related to the lack of financing.

    This also means that the shutdown of Byton's inland business in China has been close to one year. In June last year, Byton announced that due to major challenges to the company’s financing and production operations, all companies in China will start a six-month suspension of production and production from July to promote the company’s strategic restructuring.

    As a shareholder, FAW Group should be the key to Byton's restructuring.

    Byton launched a restructuring plan in October last year. The reorganization should be carried out in accordance with the reorganization plan given by FAW Group. According to FAW Group's B round investment agreement, of the annual production capacity of 150,000 vehicles at the Nanjing plant, 50,000 vehicles will be used to produce the Hongqi EQ320 developed based on M-Byte technology.