Battery startup ONE reaches cooperation with Foxconn

Battery startup Our Next Energy (ONE) has reportedly reached a strategic partnership with Foxconn. According to Crain's Detroit Business, ONE told its employees that the partnership aims to accelerate the scale-up of the U.S. battery industry and establish ONE and Foxconn as important players in the field. ONE will reportedly receive a cash injection and Foxconn will acquire a portion of the company's equity, but the transaction is not an acquisition and will not change ONE's control over the company. At present, the specific details of the relevant cooperation are still under further negotiation. A spokesperson for ONE issued a statement but did not comment on the speculation. The statement said: "As part of Our Next Energy's efforts to build the U.S. battery industry, we have been actively engaging with multiple potential partners to build a battery factory in Michigan and promote the electrification transformation of the United States. Given the confidential nature of the discussions, ONE will not comment on any speculation or rumors about potential partners." The report pointed out that Foxconn's expertise in supply chain and manufacturing will strongly support ONE's intellectual property and expertise in battery development. According to a source, the cooperation will enable ONE to obtain capital support from Foxconn while maintaining independent operations and help expand manufacturing. ONE recently restructured its business and switched to a cash-saving management model. It is reported that its existing funds can support it until the end of 2024, and the company still needs a larger round of C round of financing to ensure long-term development.

Source: Getty Images

In-depth analysis of analytical views

ONE desperately needs a partner like Foxconn with deep pockets and an interest in the automotive industry. Foxconn, best known for manufacturing iPhones for Apple, has now turned its attention to the electric vehicle market. To date, Foxconn has entered into a number of partnerships, alliances and investments in electric vehicles in the United States. In addition to the automotive industry, Foxconn announced plans in 2017 to invest $10 billion to build an LCD screen factory in Wisconsin; however, the full investment and manufacturing plan was not realized, and the development of the factory was not completed, although Foxconn still owns the land and the completed buildings. In addition, Foxconn participated in the investment in Lordstown and eventually acquired the former General Motors plant in Lordstown, but no substantial construction progress has been made at the factory after Lordstown went bankrupt. Foxconn also cooperated with Fisker and reportedly planned to produce the Fisker Pear model at the Lordstown factory. However, this project was quietly terminated after Fisker recently ran into financial difficulties and declared bankruptcy. Crain's also reported that Foxconn's cooperation with ONE will be carried out in multiple stages and is currently in the early stages, and the specific terms have not yet been finalized. Although Foxconn has been actively deploying in the automotive field, most projects have not been commercialized so far, but its cooperation with Stellantis in the semiconductor field may make some progress. Keeping ONE operating independently may be a key way to achieve the success of the cooperation between the two parties.