Apple iPhone vendor Foxconn is rebounding four% after signing a producing take care of the Chinese language electrical automotive maker
A Byton M-Byte Electric Sport Utility Vehicle (SUV) will be on display at CES 2020 in Las Vegas, Nevada, USA on Sunday January 5, 2020.
Bridget Bennett | Bloomberg | Getty Images
GUANGZHOU, China – Apple iPhone maker Foxconn has signed a contract with Chinese electric car maker Byton to support the production of its first vehicle.
The move marks a major foray into auto manufacturing by Foxconn as the company seeks to diversify its business beyond assembling consumer electrical products.
Foxconn, trading in Taiwan as Hon Hai Precision Industry Co., saw its shares rise over 4% on Tuesday after rising over 8% on Monday.
Byton, Foxconn and Nanjing development zone signed a strategic cooperation framework agreement on Monday to jointly produce Byton's M-Byte SUV by the first quarter of 2022.
According to a statement from the companies, Foxconn will share its expertise in advanced manufacturing technology and operational management experience and share industrial resources.
The deal could provide a lifeline for Byton, who first revealed the M-Byte in 2018 but has since struggled to ramp up production. The Nanjing, China-based company had to cease production and undergo a restructuring in July after the coronavirus pandemic affected business.
For Foxconn, the deal is an opportunity to diversify its business. Last year, Foxconn launched a range of tools that allow a company to design large sections of an electric car that the Taiwanese company makes. These tools include a chassis and software for the vehicle.
Foxconn has already supplied specific components to automakers like Tesla.
China's electric vehicle market continues to show strong growth. The electric car start-ups Nio, Li Auto and Xpeng each announced in the last few days that deliveries rose sharply in 2020 to end the year with new monthly highs.