One of the brighter EV startups to return out of China, Byton, has halted operations after failing to secure additional funding.
The decision was made by shareholders to facilitate restructuring, a corporation spokeswoman told Nikkei on Monday.
Under the restructuring, only core employees are going to be retained. Non-core employees in China are furloughed while their counterparts within the USA, where Byton has an R&D centre, face layoffs. Non-core employees in Europe are working reduced hours.
Byton in April started pre-production of its first model, the M-Byte crossover SUV, and was on target to start out deliveries in China later this year. However, the economic slowdown and resulting in tighter lending conditions caused by the continued Covid-19 coronavirus pandemic is taking its toll on many firms.
Byton was founded in 2016 by a pair of former BMW execs and managed to boost quite $1.2 billion from leading firms in China including Tencent Holdings, Foxconn Technology and established automaker FAW Group. However, it lost its co-founder and original CEO Carsten Breitfeld in 2019.
Breitfeld, who now heads Faraday Future, a Chinese-backed, U.S.-based EV startup that’s also on hiatus thanks to cash troubles, said he left Byton due to the increased influence of the Chinese government following the investment made by FAW Group, a state-owned enterprise.
At the reveal of the M-Byte concept at the 2018 Consumer Electronics Show, Byton said the tiny SUV would accompany a $45,000 base price. the corporate also hinted that year at a second model by unveiling an idea for a sedan called the K-Byte.
Even if Byton gets its M-Byte into showrooms in China, the corporate is going to be up against strong headwinds. additionally, to the economic slowdown, the Chinese government has crop on subsidies for EVs at a time when the competition is growing from the likes of Tesla, Nio, Xpeng and WM Motor.