The new law on foreign investment is said to replace three existing laws on joint ventures and wholly owned foreign firms.
Although Itochu’s stake will be small, the deal should create opportunities for Singulato, in which Intel Corp also already has a small stake.
Their JV is likely to build vehicles for ride-hailing giant Didi Chuxing and possibly Chinese electric car startup Singulato Motors.
The battery producer is a “sizable investor” to join Byton’s $500 million Series B round of funding.
The deal seeks to create a three-way joint venture to provide a platform for WiFi access to train users
Byton last year raised $240 million in a round of funding from investors including Chinese retailer Suning and Fullshare Holdings.
Volkswagen will also jointly buy some new cars with Didi to allow the Chinese company to expand its fleet.
Didi says it wants to establish “open platforms” whereby it could share its customer and operational skills with automakers or parts suppliers.
Byton is interested in gaining access to FAW’s supply chains for automotive components such as EV batteries.
The size of the stake remains unclear but is likely to be below 3%.