There’s light at the end of the tunnel for the embattled, electric-car maker, Byton, as reports emerge today indicating Nanjing’s biggest bankrupt startup will receive a bailout from the Nanjing government and shareholders to the tune of ¥2 billion.
While the news is indeed good, there remains much speculation as to whether it is enough to save what was the only serious competition for Tesla. Yet, the company has yet to deliver cars to its first customers.
A Byton employee has reportedly said that the Nanjing Government shall be putting in ¥1 Billion as their share of the bailout, while state-owned automaker FAW Group shall inject $50 million. There was no indication as to where the shortfall of half a billion renminbi will come from, but it is assumed other major shareholders shall be footing that bill.
Byton’s unveiled the M-Byte, its first vehicle, at IAA Frankfurt in Germany, one of the world’s leading motor shows, last September. With the Nanjing-based car maker attracting much attention for the design of the interior dubbed the “cockpit”, the future was looking very bright indeed.
Byton had expected to deliver its first cars to the China market by now, with Europe and the USA over the next few years. Full-scale production of the M-Byte was expected at the start of this year, after 100 prototype models were built and tested.
But the building and testing slipped, with only a few prototypes coming off the assembly line, confirmed some close to the company in a story published today by Caixing Global.
Then Covid hit.
And that’s where Byton’s problems really started. Sales slumped and with no money coming in, the firm soon was unable to make salary. Many were temporarily laid off. Then the news came in July that the firm would suspend operations for 6 months.
This forced most of the remaining employees to resign and seek alternative income, meaning that it is already clear that cash alone will not be enough to address Byton’s woes.
China has bet big on New Energy Vehicles as the future of automobile transportation. With Byton virtually written off by many as Nanjing’s biggest commercial flop, the government bailout is one very expensive way of wiping the egg off its face.
