Byton

What did it do?

Byton was a Nanjing-based Chinese-German electric car brand founded by former BMW and Nissan executives. The company planned to start with the M-Byte, an electric SUV concept, and launch three models by 2022. It aimed to build a factory in Nanjing with an annual capacity of 150,000 vehicles.

Why did it shut down?

The first model, the M-Byte, was due to go into production and on sale at the end of 2019, but development delays and financial problems pushed the launch back again and again. Founding CEO Carsten Breitfeld left in 2019 and later cited government interference through FAW, the state-owned partner. In April 2020 half of the US staff were furloughed, and in June 2020 operations were suspended for six months. A partnership with Foxconn struck in early 2021 did not save the company either; the German subsidiary went bankrupt in April 2021, operations in China stopped in July 2021 and Foxconn put the project on hold.

The story

On 7 January 2018, at the Consumer Electronics Show (CES) in Las Vegas, Byton unveiled its first concept car, the M-Byte electric SUV. The BBC presented Byton's car as a futuristic and “truly smart” car. The company said sales of the M-Byte would begin in China, Europe and the US in the last quarter of 2019. That car never went into series production.

The story began in 2016, when Tencent, Foxconn and the luxury car dealer Harmony New Energy Auto set up a joint venture called Future Mobility. The goal was to sell fully electric, autonomous premium cars in 2020. The company was founded by Carsten Breitfeld and Daniel Kirchert, former executives at BMW and Nissan. In January 2017 it announced a USD 1.7 billion factory in Nanjing with an initial annual capacity of 150,000 vehicles. In August 2017 it raised USD 200 million from Suning and other investors and took the name Byton. In 2018 FAW, the state-owned carmaker, also made a significant investment in the company.

The problems began at the top. Breitfeld left the company in April 2019; in a later statement, also reported by The Verge, he said he had left because of the Chinese government's active interference in the company through FAW. Around the same time the company was reported to be seeking a new USD 500 million round. The launch was postponed repeatedly. In April 2020 about half of the 450 employees at its North American headquarters were furloughed; in June 2020 the company decided to suspend operations for six months to restructure. In October 2020 the other founder, Kirchert, also left because of continuing financial problems.

In January 2021 the Taiwanese manufacturer Foxconn announced a strategic partnership with Byton and said it planned to invest USD 200 million. But in April 2021 the German subsidiary went bankrupt, and in July 2021 operations in China stopped. In September 2021 Nikkei reported that Foxconn had put the project on hold because of Byton's continuing financial problems. Byton entered bankruptcy proceedings in 2021.

Byton's story shows that in a capital-intensive industry a dazzling unveiling does not shorten the long road to series production. In a structure with many partners, once management alignment broke down, every delay created a new need for funding.

Lessons for founders

• In capital-intensive industries such as car-making, a well-received concept car is not enough; secure the cash needed to reach series production for the whole project, not round by round.
• In structures with many partners and state backing, make clear from the start who holds decision-making power; management conflict eats into the timetable.
• Lock in your supply chain and manufacturing partner under contract before announcing a launch date; every delay burns both trust and cash.

Sources

1. Byton (company) (Wikipedia)
2. Apple supplier Foxconn's EV project with China's Byton halted (Nikkei Asia, 2021-09-15)
3. Byton founder says he quit because of Chinese government interference (The Verge, 2019-09-20)
4. Chinese EV startup Byton to suspend production for reorganization (Automotive News Europe, 2020-06-30)
5. https://www.wikidata.org/wiki/Q47313237
6. Wikipedia (English)

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