Still, there has long been a fascination with electric cars, and never more so than when gas prices spike. In recent years, the emerging role of carbon emissions in advancing climate change has led more and more consumers to demand cleaner vehicle alternatives, and governments to demand reduced emissions from car manufacturers. This initiative has spread across the globe, resulting in a growing U.S., European, Japanese, and China EV market, among others.
Chinese-funded EV startup Byton is one of many manufacturers looking to bring innovative electric cars to the marketplace, and with a valuation of nearly $4 billion, it’s ahead of most. Still, the 3-year-old company is seeking an additional $500 million in growth funding. How can a company that has yet to produce a consumer model vehicle make such demands, and what will be the outcome for investors and the EV marketplace?
China’s NEV Mandate
Like many nations across the globe, China is getting on board with creating more efficient vehicles and reducing emissions. Back in September of 2017, the country finalized their NEV (new energy vehicle) mandate, which is similar to California’s Zero Emission Vehicle (ZEV) mandate.
It took effect at the beginning of April 2018, establishing a goal of creating NEV credit targets (based on sales of battery-powered and plug-in battery-petrol hybrid vehicles) of 10% in 2019 and 12% in 2020. The mandate included several regulations designed to not only promote NEV production and usage, but reduce reliance on fuel, and decrease carbon emissions.
While EV startup Byton is likely operating with this mandate in mind, the company doesn’t appear to be seeking funding from Chinese investors or the government, but rather foreign investors. Reportedly, they’re even considering an IPO, but they’re looking for private investors first.
Foreign Influence in China EV Market
As the trade war with the U.S. drags on, with car imports in the crosshairs, China doesn’t seem opposed to reaching their NEV goals with the help of foreign automakers. This was most recently evidenced when Tesla broke ground on their Shanghai manufacturing plant, dubbed the Gigafactory. It stands as the first completely foreign-owned auto plant in China, and it is slated for completion by the end of the year, after which it will begin producing the Model 3 EV for local distribution and sales.
Naturally, Chinese automakers want to compete, Byton among them. The company received its first round of funding from Chinese retail goliath Suning and Hong Kong-based Fullshare Holdings (which deals in real estate development and healthcare services), with series B funding in the amount of $500 million coming from state-owned automaker FAW Group and Contemporary Amperex Technology Co., a battery supplier.
The next round of funding (series C) should carry Byton through to production of consumer model vehicles, but the company is banking largely on local production and funding to appeal to Chinese markets and compete with better established automakers, an edge that Tesla may soon eliminate. In other words, Byton needs to get the ball rolling by securing their final round of funding.
Planned Expansion for EV Startup Byton
Byton is apparently well on their way to developing a premium electric SUV, dubbed the M-Byte, and according to anonymous sources, funding will be used to launch mass production of the vehicle, as well as fund further research and development. Perhaps the reason the company has managed to attract so much investor funding thus far is the growth of the China EV market.
From November 2017 to November 2018, NEV sales in China grew by nearly 38%, with over a million NEVs selling between January and November of 2018. Byton actually began as a collaboration between former execs from BMW and Nissan, who launched Future Mobility Corp (FMC) with the goal of producing electric vehicles in China. In September 2017, they branded their car company Byton. After releasing cars for sale in China in 2019, the company plans to move into U.S. and European markets.
For consumers and dealers looking to buy, sell, or trade electric vehicles, there’s no better platform for connecting with complementary parties than Dealerstrip.