Hon Hai Precision Industry Co’s (鴻海精密) electric vehicle (EV) project with Byton Ltd (拜騰) has been put on hold due to the Chinese start-up’s worsening financial situation, the Nikkei Asia reported yesterday, citing unidentified sources with knowledge of the matter.
“The project is not officially terminated yet, but it is very challenging to proceed at this moment,” one of the sources told the newspaper.
Hon Hai in January said that the Apple assembler and China’s Nanjing Economic and Technological Development Zone had agreed to next year start building electric sport-utility vehicles for Byton.
A few Hon Hai employees are still stationed at Byton’s factory, but “they are wrapping things up and preparing for the end when it becomes necessary,” another source said.
Some higher-level personnel involved in the project has even left Hon Hai, the report added.
However, the firm’s plans to build factories in the US and Thailand to assemble entire vehicles in 2023 are intact, the report said.
Hon Hai declined to comment, while Byton did not immediately respond to a request for comment.
Meanwhile, the firm has agreed to team up with Thailand’s state-owned oil supplier PTT Public Co to invest up to US$2 billion in launching an EV joint venture in Thailand.
Hon Hai signed an agreement with PTT on Tuesday to open an EV production site, with the two partners setting their sights on the ASEAN market, it said.
Through the joint venture, PTT would use its subsidiary Arun Plus Co to consolidate the group’s energy development resources and help the two partners build an EV development chain in Thailand, Hon Hai said.
EV designers, component producers, assemblers, power system providers and battery suppliers in Thailand are welcome to join the development chain to roll out their products, Hon Hai added.
At the end of May, Hon Hai announced that it had signed a memorandum of understanding with PTT to enter the EV market in Thailand.
The agreement signed on Tuesday included financial terms for the joint venture.
After signing Tuesday’s accord, Hon Hai said that the investment plan would be carried out over five to six years by setting up production lines, a supply chain management center and an engineering research and development center.
Hon Hai said that the EV joint venture’s production site might be built in the Eastern Economic Corridor special development zone in Thailand.
The development zone is an initiative the Thai government has laid out as part of a 20-year strategy for the country to achieve high-income status by 2036.
In the initial two to three years of the agreement with PTT, the joint venture aims to produce 50,000 EVs a year, with production expected to expand to 150,000 units annually, Hon Hai said.
The government targets 30 percent of all vehicle production to be zero-emission vehicles by 2030, in an effort to produce 725,000 emission-free passenger vehicles by that year.
Hon Hai said that it is planning to take advantage of the government’s ambition to provide the domestic market with innovations and resources in EV development and thereby help Thai auto and auto part makers transform themselves into EV developers.
Commenting on the joint venture with PTT, Hon Hai chairman Young Liu (劉揚偉) said that he expects that the EV market in the ASEAN bloc would grow rapidly and cooperation with PTT would create tremendous business opportunities for many Thai vehicle developers.
Additional reporting by CNA
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