Byton files for bankruptcy
The Chinese electric car start-up Byton, once launched with great ambitions, is going bankrupt. One may be tempted to say “finally” since the danger of going out of business was on the horizon for nearly two years. Yet, we look back at what could have been a great story as well.
The news of a Chinese court having granted the insolvency proceeding to go ahead in June is hardly surprising. Byton has been on the brink of bankruptcy since 2021 when a creditor called for insolvency proceedings for Nanjing Zhixing New Energy Vehicle Technology Development Co – Byton’s primary business unit. While these did not go ahead that year, “It will probably be very difficult for Byton to revive the business,” a person close to the company said at the time, and it appears that it was indeed.
Now having filed for bankruptcy out of its own volition, the court ruled in favour of the proceedings. It found that although the companies had large assets, the rights and interests of creditors had not been protected for many years. In addition, there were legal defects that made effective enforcement by the court impossible.
Yet, there used to be a different story. Byton, at its inception in September 2017, came with high hopes and a core management team comprising personnel from the likes of BMW and Tesla. Backers included FAW and CATL initially, and Byton set out to establish bases in Nanjing, China, the Silicon Valley, US, and Munich, Germany. (German prosecutors investigated Byton over delayed insolvency proceedings already in 2021.)
Moreover, Byton had started pre-series production of the M-Byte in October 2019 and was allegedly on its way to series production.
Yet, the business was shaken in the wake of the Corona pandemic and, in June 2020, temporarily ceased operations.
The cooperation with Foxconn was announced in January 2021, and the associated investment was then seen as a lifeline. However, the Taiwanese company cut all ties only a few months later, quoting Byton’s deteriorating financial situation as reported.
On a historical side note, Byton is another EV startup that faltered after Foxconn initially offered help. Lordstown Motors declared bankruptcy in late June, accusing Foxconn of malpractice.
Byton has done no such thing and appears to have silently given in to what has been in the cards for over a year.
As things stand, the M-Byte won’t see the light of day despite having raked up no less than 50,000 pre-orders when debuting in 2019.