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India approves Apple partners and Samsung for $143 billion smartphone manufacturing plan

Samsung and three major contract manufacturing partners of Apple are among 16 firms to win $6.65 billion incentives under India’s federal plan to boost domestic smartphone production over the next five years. These companies had applied for the incentive program in August.

In a statement Tuesday evening, Indian Ministry of Electronics and Information Technology (MeitY) said these companies will be producing smartphones and other electronics components worth more than $143 billion over the next five years. In return, India will offer them an incentive of 4% to 6% on additional sales of goods produced locally over five years, with 2019-2020 set as the base year.

New Delhi’s move is aimed at significantly improving India’s manufacturing and exporting capacities and generating more local jobs. Around 60% of the locally produced products will be exported, the Indian ministry said. The companies will generate more than 200,000 direct employment opportunities in next five years and as many as 600,000 indirect employment opportunities during the same period, the ministry said.

The move is also a precursor to how the dynamics among major smartphone makers might change in India, the world’s second largest market, over the next few years. The inclusion of Foxconn, Wistron and Pegatron underscores how rapidly Apple plans to expand its local manufacturing capabilities in India. Wistron began assembling a handful of iPhone models in India three years ago, followed by Foxconn. Pegatron has yet to start production in India.

“Apple and Samsung together account for nearly 60% of global sales revenue of mobile phones and this scheme is expected to increase their manufacturing base manifold in the country,” the ministry said.

“Industry has reposed its faith in India’s stellar progress as a world class manufacturing destination and this resonates strongly with Prime Minister’s clarion call of AtmaNirbhar Bharat – a self-reliant India,” the ministry added.

Indian firms Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics have also received the approval. But missing from the list are Chinese smartphone makers Oppo, Vivo, OnePlus and Realme that had not applied for the program. Chinese smartphone vendors currently command about 80% of the Indian market. Samsung, which once led the Indian smartphone market, has faced intense competition from Xiaomi and Vivo in recent years.

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China’s EV startup Xpeng pulls in $500 million Series C+

Xpeng, an electric vehicle startup run by former Alibaba executive He Xiaopeng, said Monday it has raised around $500 million in a Series C+ round to further develop models tailored to China’s tech-savvy middle-class consumers.

The announcement followed its Series C round of $400 million closed last November. A source told TechCrunch that the company’s valuation at the time had exceeded the 25 billion yuan ($3.57 billion) round raised in August 2018.

The new proceeds bring the five-year-old Chinese startup’s to-date fundings announced to $1.7 billion.

Investors in the latest round include Hong Kong-based private equity firm Aspex Management; the storied American tech hedge fund Coatue Management; China’s top private equity fund Hillhouse Capital; and Sequoia Capital China. The other existing big-name backers are Foxconn, Xiaomi, GGV Capital, Morningside Venture Capital, IDG Capital, and Primavera Capital.

Despite the sizable round, Xpeng is headed for a slew of challenges. Electric vehicle sales in China have shrunk in the wake of reduced government subsidies set in motion last year, and the COVID-19 pandemic is expected to further dampen demand as the economy weakens.

Xpeng’s Chinese rival Byton, which counts heavyweights backers like Tencent, FAW Group, and Foxconn, is already showing signs of strain as it furloughed about half of its 450 North America-based staff citing coronavirus impact. In June, the company put the brakes on production for internal reorganization.

Xpeng’s other competitors seem to have proven more resilient. In April, Nasdaq-listed Nio secured a $1 billion investment for its Chinese entity, while Li Auto ventured to file for a U.S. public listing in July.

Xpeng claims it has so far been able to withstand coronavirus challenges. In May, the company obtained a production license for its fully-owned car plant in a city near its Guangzhou headquarters, signaling its reduced dependence on manufacturing partner Haima Automobile.

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Foxconn and Fiat Chrysler partner to develop EVs and an ‘internet of vehicles’ business

Foxconn Technology Group, the Taiwanese electronics giant best known for its iPhone manufacturing contract, is forming a joint venture with Fiat Chrysler Automobiles to build electric vehicles in China.

The joint venture was disclosed in a regulatory filing. Nikkei was first to report the joint venture.

According to the filing, each party will own 50% of the venture to develop and manufacture electric vehicles and engage in an IOV, what Foxconn parent company Hon Hai calls the “internet of vehicles” business. Hon Hai’s direct shareholding in the subsidiary will not exceed 40%, the filing says.

The venture will initially focus on making electric vehicles for China. But these vehicles could be exported at a later date, according to Foxconn.

The wording in the regulatory filing suggests these will be new vehicles that are designed and built from the ground up and not a project to electrify any of the vehicles in FCA’s current portfolio.

The venture could give FCA a better path to capturing more business in China, the world’s largest market for electric vehicles.

Foxconn has invested in other electric vehicle ventures before, although this appears to be the first tie-up in which the company will develop and build the product. EV startup Byton was originally started as Future Mobility Corporation as a joint venture between Harmony Auto, Tencent and Foxconn. And Foxconn is also an investor in XPeng Motors, the Chinese electric vehicle startup that recently raised a fresh injection of $400 million in capital and has taken on Xiaomi as a strategic investor.

Source: TechCrunch