SPAC Trend Continues
The EV business is reportedly in talks with potential SPACs and investors about going public. The startup, which is also backed by China’s state-owned automaker FAW Group and EV battery manufacturer CATL, aims to make its public debut this year.
SPACs have been extremely popular lately as it offers a chance for non-listed companies to go public without all the paperwork of a traditional initial public offering (IPO). SPAC is initially listed as a shell company before finding a real business that wants to be publicly listed, and they merge together.
The Chinese EV business was dealing with significant cash flow challenges since 2019 as investors were cautious about injecting funds into the EV sector, which was experiencing a slowdown in China.
The startup started to build a car plant in China but paused the construction in July after it decided to restructure its business. Last month, the business signed an agreement with Foxconn and the Nanjing Economic and Technological Development Zone to start manufacturing the startup’s first vehicle, the M-Byte, by the Q1 2022.
The deal includes a $200 million investment by Foxconn into the SUV research and production project. The Taiwan-based tech company will also contribute to building a supply chain for the EV production in a bid to slash car manufacturing costs.
“The company is currently focusing on the optimisation of the supply chain manufacturing of Byton’s new energy vehicles, and will not comment on other market rumours,” the business said in a statement.
The semiconductors company is expected to provide Byton with 100 of its engineers to help accelerate the mass production of these EVs, starting from the Q1 of 2022.
During an online meeting with the startup, Young Liu, chairman of Foxconn said his company’s aim is not only to ensure the success of the EV business but also cash in on this partnership to develop Nanjing into an EV hub.
"We are pleased to work with Byton to advance the production of the M-Byte. This will allow us to contribute toward the further growth of the electric vehicle industry, a demonstration of our commitment in the transformation of the traditional automotive industry," Liu said.
In October, Foxconn rolled out an open platform for electric vehicles that can be utilized by all stakeholders as they create functional attributes and systems that will facilitate the expansion of the entire market.
Chinese EV startup Byton is eyeing a public debut through a merger deal with a SPAC.
About the Author
Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.