Byton to suspend production for reorganization

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SHANGHAI — China-based electric car startup Byton, which has planned sales in the U.S., said Tuesday it will suspend production starting July 1 to conduct a reorganization of the automaker after being hit by the coronavirus pandemic.

The company, which is backed by state-owned automaker FAW Group and battery supplier Contemporary Amperex Technology, said it was also actively raising funds to address issues relating to unpaid staff salaries and that it hoped to start paying employees from July.

The suspension is set to last six months, closely held Byton told staff in an email seen by Bloomberg News.

“The new coronavirus epidemic has brought great challenges to Byton’s financing and production operations,” the company said in a statement. “After careful consideration and joint consultations with our shareholders and management, we have decided to, from July 1, kickstart a plan to lower employee costs and promote the company’s strategic reorganization.”

Byton produces all of its vehicles at a plant in Nanjing. Starting Wednesday it will suspend most operations in China, where its activities include research and development.

In April, industry website Electrek reported that Byton had put hundreds of employees from its Santa Clara facility in California on furlough.

Byton was launched in September 2017 by Future Mobility Corp, a company co-founded by former BMW and Nissan executives, and also has software and design facilities in the United States and Germany.

Byton earlier this year said it planned to launch sales of its first product, the M-Byte electric crossover, in Germany, Switzerland, Norway, France, the Netherlands and Sweden in the second half of 2021.

The automaker said in November it received licenses to sell the vehicle in California in a move that Byton said paves the way for North American sales in 2021.

Byton is among a series of Chinese electric vehicle manufacturing startups that have emerged in recent years to challenge foreign companies like Tesla.

China, which has been eager to curb smog and spur its own auto industry, has said it wants so-called new energy vehicles to account for 25 percent of auto sales by 2025, up from around 5 percent currently.

But the appetite to fund such startups began falling last year and has been dealt a further, heavy blow by the coronavirus pandemic, leaving a number fighting to survive.

In May, sales of NEVs fell for an 11th month to 82,000 units, China’s largest auto industry association said. NEVs include battery-powered electric, plug-in gasoline-electric hybrid and hydrogen fuel-cell vehicles.

Bloomberg contributed to this report.

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Saurabh Shukla

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