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NEV maker Byton halts production to restructure

Reuters
Chinese electric car startup Byton said yesterday it will suspend production from today to restructure after being hit by the coronavirus pandemic.
Reuters

Chinese electric car startup Byton said yesterday it will suspend production from today to restructure after being hit by the coronavirus pandemic.

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

“The new coronavirus epidemic has brought great challenges to Byton’s financing and production operations,” it 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,” it said.

Byton produces its vehicles at a plant in Nanjing. From today it will suspend most operations in China, where its activities include research and development.

The company is among several Chinese electric vehicle manufacturing startups that have emerged in recent years to challenge foreign companies like Tesla Inc. China, which has been eager to curb smog and spur its own auto industry, has said it wants new energy vehicles to account for 25 precent of auto sales by 2025, up from around 5 percent now.

But funding of such startups began falling last year and has been dealt a further, heavy blow by the pandemic, leaving several 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 petrol-electric hybrid and hydrogen fuel-cell vehicles.

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

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

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