A Byton M-Byte electric sport utility vehicle (SUV) is displayed 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 car maker Byton to help produce its first vehicle.
The move marks a major boost for Foxconn to car manufacturing, while trying to diversify its business beyond just assembling consumer electrical products.
Foxconn, which trades Hon Hai Precision Industry Co. in Taiwan, saw its shares jump more than 4% on Tuesday after closing more than 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.
Foxconn will provide its expertise in advanced manufacturing technology, operational management experience and share industrial resources, according to a statement from the companies.
The deal could provide a lifeline for Byton, who first unveiled the M-Byte in 2018, but has since struggled to increase production. The Nanjing, China-based company had to suspend production in July and undergo a reorganization after the coronavirus pandemic hurt business.
For Foxconn, the deal is a way of diversifying 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 company. These tools include a chassis and also software for the vehicle.
Foxconn already supplies specific components to car manufacturers, including Tesla.
China’s electric vehicle market continues to show strong growth. Electric car start-ups Nio, Li Auto and Xpeng have announced in the past few days that deliveries have increased in 2020 to end the year with new monthly highs.