Do you think the big news today is the listing of CATL on the GEM board of A shares? The new car company, Byton, uses $500 million in Series B financing to speak out: they are the headline.
For Byton, most people’s first reaction is that two German car industry executives have made a smart electric vehicle with a 49-inch center console screen. The product is aggressive and not local, who gave Draeger and Breitfeld the courage? Today we will take stock of the forces behind Byton.
Series B
If we trace back from Series B, it was led by FAW and followed by CATL.
We have previously written about the cooperation between FAW and Byton. Even local carmakers like Li Xiang and Li Bin have found traditional car manufacturers to cooperate with. Byton has full demands in cooperation with FAW. In the announcement of the cooperation with FAW, Byton mentioned the “hope of obtaining support from FAW’s component supply chain,” which is a reason.
In addition, NIO and WM have both solved their production qualifications, but Byton seems to have not yet. Since last year, the National Development and Reform Commission has obviously tightened the qualification approval plan. From this point of view, it is not ruled out that there will be a “FAW Byton” logo on the road in the future. Some media reports also mentioned that FAW will help Byton’s first mass-produced car to be launched as scheduled next year.
I previously talked with Byton’s president, Draeger, about the topic of sales channel system. Byton will not do offline stores like Tesla and NIO. FAW’s mature dealer system also has great attraction for Byton.
As for CATL, many people are attracted by the 49-inch large screen and forget that Byton’s Concept rear-wheel-drive version battery pack specification reaches 71kWh, and the all-wheel-drive version reaches 95kWh. What is this concept? Byton’s battery stacking ability is second only to Tesla.
Therefore, we cannot simply regard CATL’s investment as purely financial investment. Byton Concept is CATL’s model project, similar to Qualcomm’s investment in Xiaomi in 2010. From Byton’s point of view, CATL’s investment also means a shot of confidence in battery supply.
Series A
Byton’s Series A is very interesting. The earliest report said it was $40 million, later reports said it was $200 million, and now the report has become $240 million.
Of the $200 million in Series A, $80 million was finalized in August 2017, led by a new energy industry investment fund in Nanjing. This investment fund is backed by Suning, Nanjing Fengsheng Group and a state-owned enterprise in Jiangsu.
The traceability of Zhang Jindong’s investment in Byton can be seen from the news that Suning invested in Byton half a month ago, when the first Suning Easy Car supermarket in the country opened. Soon after the investment was announced, Suning divested and split its automotive business and established Suning Easy Car Company, officially announcing its entry into the upstream and downstream industry chain of the automotive industry. “Cooperation with Byton goes beyond capital” and “Mr. Zhang highly recognizes the Byton team and products.” This is not just talk.
In the future Byton’s central control screen, Suning’s apps such as Suning Easy Buy and PPTV will also be installed. Of course, for Byton, Suning’s greatest value lies in the field of smart retail. This is a sales channel resource outside of the FAW dealer system.
As for the investment of Nanjing Fengsheng Group and Jiangsu state-owned enterprises, it is because Nanjing is Byton’s base.
This is not difficult to understand, including WM factory settling in Wenzhou and Chehejia factory settling in Changzhou. The policy resources based on land and taxation from these local governments cannot be separated. Byton’s factory has been listed as one of the major projects in Jiangsu Province, and the high attention and policy support of the provincial and municipal governments are the reasons why early media reports said that Byton’s global headquarters is not in Nanjing, but today Byton announced that its global headquarters in Nanjing is officially operational. Zhang Jinghua, member of the Jiangsu Provincial Party Committee and Secretary of the Nanjing Municipal Party Committee, also appeared at the event.
The remaining $40 million comes from Harmony Auto. You may ask, why are there eight months between these two rounds of financing? After Harmony Auto’s $40 million investment arrived, Foxconn and Tencent both withdrew from the Byton project. It must be said that the withdrawal of the two heavyweight giants had some impact on Byton’s financing, but fortunately, the toughest moment has passed.
Let’s talk about the major shareholder of Byton, Harmony Auto. At today’s new headquarters launch ceremony, Feng Changge, Chairman of Harmony Auto, also appeared at the scene as the co-founder and co-chairman of Byton. What is Harmony Auto? Let me show you Harmony’s official website:
This is a premium car dealer with 52 luxury/ultra-luxury brand 4S outlets across 7 provinces and 2 municipalities in China. As you can see, this is another sales channel resource for BYTON…
Finally, BYTON, which has extreme performance but whose attention has been taken away by radical design, is rare among all new car makers, including Tesla. BYTON will announce its first sedan tomorrow in Shanghai and showcase it at CES Asia from the 13th. Stay tuned for what other new innovations BYTON has to offer after showing off its big screen.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.