Chinese electric vehicle startup Byton could be steering itself out of deep financial trouble with the departure of its founder as part of a broader restructuring plan to begin production of its first model next year.
Why it matters: The removal of a formative leader marks a turning point for the once-hyped EV startup that has suspended operations for months after the onset of a massive cash crunch beginning last year.
Details: Daniel Kirchert, co-founder and CEO of Byton, has left the business and the company’s board of directors have approved a restructuring plan, Chinese media reported Wednesday citing persons with the knowledge of the matter.
- Byton’s chief of staff Ding Qingfen was appointed co-CEO in July, in charge of implementing the new restructuring plan. Part of the plan includes establishing a new firm to raise funds, multiple sources said.
- A Byton spokeswoman confirmed to TechNode on Friday the plan to resume operations to ramp up the production of its first model “as soon as possible.” The company declined to comment further regarding Kirchert’s departure.
- There were signs of a Byton revival early last month when its major shareholders, including Volkswagen’s manufacturing partner FAW Group and the city government of Nanjing in eastern China, formed a new company led by a Byton executive.
- The new company, Nanjing Shengteng Automobile Technology Co., Ltd. has registered capital of RMB 1.5 billion (around $223 million). Duan Lianxiang, Byton’s vice president of research and development, is listed as a general manager, according to business research platform Tianyancha.com.
- The newly formed company is working on a RMB 2 billion financing project mainly from existing shareholders to get Byton’s first model, M-Byte, on the road as early as late 2021. Both FAW and the Nanjing government indicated they would participate while other current backers declined to follow, according to a Caixin report (in Chinese).
Context: Byton is not the only cash-strapped EV maker returning from near-death in recent months. Boosted China’s new energy vehicle (NEV) sales figures and local governments scrambling to bail out homegrown young leaders, other Chinese EV firms could rejoin the race.
- Another would-be EV maker, Enovate, has reportedly (in Chinese) closed a RMB 5 billion round of funding from a group of strategic investors including state-owned banks and capital firms, with plans to list on China’s Nasdaq-like STAR Market in 2021.
- WM Motor has similar plans—the company recently secured a whopping RMB 10 billion round of funding from a group of capital funds owned by the Shanghai municipal government, among others.
- NEV sales in China have resumed growth at double-digit rates since July, according to figures from the China Association of Automobile Manufacturers, with Nio and Xpeng more than doubling their sales in the third quarter from the same period a year ago.
READ MORE: Nio, Xpeng, Li Auto: your cheat sheet to China’s listed Tesla rivals