Insolvency proceedings have been initiated for Byton GmbH, a subsidiary of Chinese automaker Byton, according to an announcement by the Munich District Court.
Byton was co-founded by two former BMW managers and made big promises in 2018 regarding electric car production. The company had ambitious goals here and wanted to launch a competitive E-SUV, at a price around 45,000 euros. Byton appeared at CES 2018 with this promise, and the company also made an appearance at the IAA in 2019. Here, Byton presented a production-ready model, but a production start did not follow until today.
The plan was to start production in 2020, but the company has now stopped operating the German subsidiary altogether due to financial bottlenecks. Wirtschaftswoche reported that the insolvency application came from a creditor of Byton. Official reports from Byton blame the Corona crisis, saying numerous orders have been canceled. However, according to a report in WIrtschaftswoche, the financial situation is due to the lack of payments from business partners, according to an insider. Here, several hundred million US dollars were missing in the end, so that employees and also suppliers could no longer be paid. As a result, all American and German employees were also issued in the meantime.
First layoffs as early as 2020
A large part of the employees in the USA was already dismissed by Byton in April last year. German employees, like their colleagues in the U.S., have also stopped receiving pay from the company for months. The two co-founders of Byton Carsten Breitfeld and Daniel Kichert are meanwhile also no longer in the company. So the former BMW managers have moved to the competition. Breitfeld has already moved to Faraday Future since the beginning of 2019 and Kirchert to the Chinese manufacturer Evergrande Auto.
Future plans unclear
Earlier this year, contract manufacturer Foxconn had introduced itself as a partner of Byton and held out the prospect of a production start in 2022. Inquiries about the plans, however, have so far been ignored by Byton, so it is unclear what the future holds for the company.