Troubled Chinese electric vehicle startup Byton Ltd could be bailed out to the tune of 2 billion yuan ($292 million) by shareholders including the Nanjing city government, according to sources familiar with the matter.
Byton is in desperate need of a financial injection and has suspended operations for nearly three months due to outstanding debts exacerbated by the pandemic. The two primary sources of the financial lifeline would be the Nanjing city government who gave an undertaking to invest $150 million, and state-owned automaker FAW Group which plans to inject $50 million, a Byton employee said.
While the extra investment might be seen as good news for Byton it is unclear that this will be enough to address all its problems. It still faces significant obstacles as most of its employees resigned and it is unclear how much money the startup really needs to commence mass production of electric cars. People close to the company said it hasn’t finished research and development on its first model, the M-Byte.
Established in 2016 by former BMW and Nissan Motor executives, Byton is among a group of Chinese startups that rushed into the burgeoning new-energy vehicle sector as central and local governments offered generous subsidies.
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