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China's FAW to Partner with BYTON to Build its Electric Vehicles

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【Summary】China’s oldest automaker FAW (First Automotive Works), has announced a partnership with BYTON—one of China’s newest electric automakers. The collaboration is another example of a tech company partnering with a traditional automaker in an automotive industry on the verge of widespread electrification and autonomous driving.

Eric Walz    Apr 20, 2018 10:49 AM PT
China's FAW to Partner with BYTON to Build its Electric Vehicles

BEIJING — China's oldest automaker FAW (First Automotive Works), has announced a partnership with BYTON—one of China's newest electric automakers. The collaboration is another example of a tech company partnering with a traditional automaker in an automotive industry on the verge of widespread electrification and autonomous driving.

FAW has made an unspecified investment in start-up BYTON, with the two companies cooperating in research and development, production, sales and services.

FAW's investment is part of BYTON's B round of fundraising, according to the company's co-founder and president Daniel Kirchert, speaking in Beijing on Friday. He declined to reveal further details, other than to say the process has been "very smooth".

"FAW is the [eldest son] of China's automobile industry and Byston is a car start-up driven by technology. Our cooperation has profound meaning," said Liang Guiyou, head of the new energy development institute at FAW.

BYTON is China-based but the company is run by former executives of European car makers, including Dr. Carsten Breitfeld, an expert in electric mobility who spent twenty years at BMW. BYTON is aiming for a target valuation of US$1.2 billion, according to a February report by China Money Network.

Claiming to be first with a "smart intuitive vehicle", BYTON unveiled its concept SUV at the Consumer Electronics Show (CES) in Las Vegas in January. The vehicle includes facial recognition access, assistive driving technologies and hand gesture controls.

The BYTON concept car also features a 49-inch, edge-to-edge dashboard display and a smaller one embedded into the steering wheel, which can monitor in real time the health and vital signs of the driver.

byton2.jpg

BYTON's unique Shared Experience Display

BYTON's SUV will cost about 40 percent less than the Tesla Model X in China. The SUV is scheduled for production and sales in China next year, followed by American and European markets in 2020.

The FAW-BYTON alliance comes after China announced it would scrap foreign ownership limits on local auto firms by 2022. Currently, foreign carmakers are required to set up a joint venture with a mainland Chinese firm, with the foreign partner's investment capped at 50 per cent.

California-based Tesla is also looking to build a factory in China, however the company's CEO Elon Musk is reluctant since Chinese regulations require foreign car makers to engage in a joint venture with a local firms. Tesla, however, wants to retain sole ownership of any China-based manufacturing facility.

BYTON's last round of fundraising was in August, when it reportedly raised US$240 million from Harmony Auto, Auto Investments, League Automotive Technologies, Legend Capital and an industrial investment fund in China's eastern Jiangsu province, among others.

The company's first factory is currently under construction in Nanjing, the capital of Jiangsu province.

BYTON is one of several dozen electric car start-ups to have emerged in China in recent years after the central government started handing out manufacturing permits to firms that were not traditional car industry players. Other automakers committed to electric vehicles are BYD, SIAC, GEELY and BIAC.

To encourage growth in the new market, Beijing offered research and development grants to carmakers and subsidies to consumers. It also exempted new-energy vehicles (NEVs) from ownership quotas in the country's bigger cities.

In February, BYTON announced a partnership with Aurora, a self-driving startup based in Silicon Valley co-founded by Chris Urmson, the former head of Google's self-driving car project. Aurora is working with BYTON on AI-based self-driving technology.

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