Byton Ltd., a former Chinese high-flying electric vehicle start-up, missed payments to workers and idled production lines as a local court opened bankruptcy hearings.
A court in Nanjing, Jiangsu Province, held a hearing Monday on the claim of Shanghai Huaxun Network System Co., a creditor of Byton. Shanghai Huaxun has filed for bankruptcy proceedings for Nanjing Zhixing New Energy Vehicle Technology Development Co., Byton’s main business unit.
Byton has suspended workers’ pay as its factories shut down, according to a person close to the company. Byton, which unveiled its first M-Byte concept car in 2018, has yet to begin commercial production which was originally slated for 2019. Even if the company could launch products soon, Byton cars would not be competitive with it. their rivals under current market conditions, the person said.
Byton did not immediately respond to a request for comment on the Louisiana bankruptcy case and its latest business issues.
Founded in 2016 by former BMW and Nissan Motor executives, Byton is one of a group of Chinese startups that rushed into the burgeoning new energy vehicle industry as central and local governments provided generous grants. . The narrow-stake automaker, initially named Future Mobility Corp., was among the early investors, including Foxconn Technology Group and tech giant Tencent Holdings Ltd. Nanjing City Government’s investment vehicle owned 19.4% of Zhixing New Energy.
In 2017, Future Mobility officially adopted the Byton brand name shortly after securing $ 240 million in funding from retail giant Suning and Fullshare Holdings.
In 2018, state-owned China FAW led Byton’s $ 500 million B round financing and signed a cooperation framework to collaborate in areas such as component procurement, platform technology and l ‘investment. In September 2018, Byton acquired an FAW unit for 850 million yuan ($ 133 million) to obtain an automobile manufacturing license.
Byton’s capital stress began to show in September 2019 when he failed to complete a funding round led by FAW. A management overhaul and the Covid-19 pandemic further exacerbated Byton’s problems in 2020. The company suspended all domestic operations and personnel on leave in July of last year. Former CEO Daniel Kirchert left the company and joined Evergrande’s EV unit shortly thereafter.
“It will probably be very difficult for Byton to get back on track,” said a person close to the company. Byton’s main research and development unit was overseas with high costs, which required significant new investments to restart production.
The company Subscription request a new tech company named Shengteng in September 2020. It planned to raise 2 billion yuan ($ 289 million) from FAW and the Nanjing City Government Investment Vehicle to accelerate mass production of the electric SUV M-Byte.
A new lifeline emerged in January this year after Byton hit a strategic cooperation deal with the supplier of Apple Inc. Foxconn. Serial production of the M-Byte was scheduled for 2022.
While Byton’s survival depends on funding from FAW, the Nanjing government or Foxconn, all three parties may have lost interest, people familiar with the matter say. FAW is fully dedicated to converting its flagship brand Red Flag to electric vehicles by 2030. Foxconn pulled out of its investment after a few months of due diligence. The Nanjing government, which once helped Byton with his payroll, stopped providing aid for two months.
As of June 2020, Byton had around 1,000 employees in China and around 500 elsewhere, including the United States.
Byton is also facing new competitors in the electric vehicle market as competition has intensified compared to a few years ago. Local startups Nio Inc., Li Auto Inc. and Xpeng Inc. made their debuts in the US stock market, while tech giants from Baidu Inc. to Xiaomi Inc. have invested billions of dollars in their own businesses. of electric vehicles.
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