Byton, a Chinese electric-car startup, is about to close a funding agreement with the state-owned China FAW Group Co. in preparation of its plan to launch new cars in China's blossoming energy vehicle market.
FAW is ranked third among automakers in China. The two companies are scheduled to sign an agreement within this week that will allow FAW to invest $100 million into Byton. Reports said that the startup firm plans to accumulate about $500 million from its latest round of fundraising. The company's value will be more than $2.5 billion after the fundraising.
The former BMW AG and Nissan Motor Co. managers led startup will stand among the Chinese electric -car startups that have raised at least $1 billion after the deal was signed. The deal showed that investors are positioning as electric vehicles make the biggest shifts in the automotive since the dawn of cars.
China accounts for more than 50 percent of the total sales of electric vehicles in 2018. According to the estimate of the BloombergNEF, investors injected more or less $8 billion to fund Chinese EV startups in last year. The United States-listed NIO Inc led the investments.
FAW led the $500 million financings round in 2018. The company is moving forward to revive the limousine brand Red Flag which is known to have been favored by the late Chinese leader Mao Zedong. The company invested in 2018 to initiate its plan to revive the brand model through a joint venture with Byton in product development, manufacturing and sales.
The Chinese startup firm has a factory in Nanjing and it is planning to sell is first model M-Byte in China at the end of the year. Daniel Kirchert, one of the founders of Byton said in an interview that they are planning to sell the cars in North America and Europe around mid-2020. He added that the company will consider an initial public offering after new financing and production begins.
Recently, Byton announced that it has received over 50,000 orders globally for its new SUV model and he plans to start its production at the end of this year. Mr. Kirchert said that they plan to launch their first production car this July. He also added that the company aims to manufacture 10,000 units by the first half of 2020.
The Chinese retailer Suning and Contemporary Amparex Technology Co. are included in the list of backers for the company.
