Troubled by its finance, although deeply involved in the automotive industry for many years, Byton's founding team believes high-tech car production for them is not easier than its internet company counterparts.
At the Consumer Electronics Show (CES) held in Las Vegas, USA in January 2018, Byton made a big hit and officially became a high-profile high-tech car company. What made it popular was the 1.25-meter large screen in the front of the car in its BTYON-CONCEPT (later named M-Byte) concept car.
With a diagonal length of 50 inches and 1.25 meters width, this is the largest screen ever installed on a car. According to Byton, the big screen is just the entry point for its car innovation; the company hopes to provide users with a "Digital VIP Room" experience.
Foreigners' dream of making cars in China comes true
Byton can be traced back to FMC (Future Mobility Corporation Ltd.), which was established in March 2016. In September 2017, the BYTON brand was officially released. BYTON means Bytes on Wheels, which bytes (bytes) represent the Internet and wheels (wheels) represent traditional cars. Byton represents the integration of these two, reflecting the concept and determination of linking the automotive industry and digital technology while intending to highlight product positioning for "the next generation of intelligent terminals".
Unlike other high-tech vehicle brands in China, both of the two co-founders of Byton are German: Chairman and CEO Carsten Breitfeld is a technology expert who has worked for BMW for more than 20 years and served as Vice President of the group for more than 10 years.BMW's alternative energy vehicle i8 is a model he's proud of; while president DAI Lei is a marketing expert. He had been living in China since he first entered in Nanjing University in 1998. He served as the senior vice president of BMW Brilliance, the General Manager of Infiniti China and other roles.
At the same time, Byton has set up R&D centers in Germany and the United States and spent a lot of money on recruiting a large number of experienced talents and experts from China, Germany, the United States, and other places. Blyton's CFO LI Guobao(李国宝)also had served as CFO in Ford China, Changan Ford Mazda, and other car companies. He also pushed Ford's acquisition of companies such as Land Rover. CHEN Taiyu(陈泰宇), the vice president of digital technology, served as the director of information and product safety at Tesla; SAI Ruibo(赛睿博), the head of power and electronics systems, in-vehicle networking research and development, previously worked in the parts giant Delphi Renault as an Engineering Director. Byton announced that the global management team of 24 top talents had fundamentally taken shape.
Similar to its talent portfolio, the investors behind Byton also have a solid background. The company is endorsed by the FAW Group, which is called "The No.1 Car Manufacturer of the Republic of China", China Merchants Capital, and Jiangsu One Belt One Road Investment Fund. Partly thanks to the relationship with FAW Group, Byton also obtained the qualification for producing electric cars through the acquisition of FAW Huali.
What kind of car does the company want to build after receiving help from state-owned enterprises, painstakingly picking the top talents and qualification acquirement?
High-end brand promoted by the 50-inch large screen
Byton hopes to build itself into a high-end electric car brand. Its first product, M-Byte, locked its competitors into Audi Q5; its pre-subsidy price is around USD 43,500, enjoying a slight advantage. While its second product, K-Byte, targeted audio A4L as its rival, the pre-subsidy price will be even less than USD 43,500.
Comparing with the classic high-end brands, where does the competitive advantage lie in for Byton? It is definitely not enough to only rely on a 50-inch super large screen. After a hit on CES this year, Carsten Breitfeldn said in an interview that the super big screen is just the entry point for the new round of revolution in the automotive industry.
In Byton's view, the big screen can optimize user's visual experience, so the screen will become an indispensable part of the "next generation car", and the future car screen will become larger and clearer while more screens will be established in cars. They will provide better protection to human eyes and better adaptability to strong lights, and richer information will also be displayed.
According to Carsten Breitfeld, the big screen is mainly divided into three areas, and the driver's front area is the main driving information area. When the Byron car is in driving, all driving information will appear in front of the driver, and entertainment information will not appear in this position. The three screens can display content independently, or they can be integrated when a specific mode turned on. For example, the middle and right windows can be combined to display navigation. The 50-inch screen is far away from the main driver and the co-driver seats, so Byton specially designed gesture control for convenience.
In addition to the central control 50-inch screen, Byton also equipped a screen on the steering wheel and rear seats of the vehicle. Since different people have different requirements for the screen, Byton has launched face recognition based on cloud data to help users get the data they need from the cloud on any car. The hidden 5G antenna on the roof is designed to import data from the cloud more quickly.
In addition, Byton plans to synchronize all the owner's smart devices with BYTON and use onboard health sensors such as the weighing seat base and wireless wristband to observe and give accurate advice to help car owners or occupants improve their health.
Byton painted an ideal picture of a future life with high-tech cars. However, a dream is a dream, to what level can their mass production dream realize?
How long do we need to wait until the dream future come?
Carsten Breitfeld said that 80% of the M-Byte concept car will be mass-produced, and the price of the cars will be as low as USD 43,500. However, not even mentioning whether Carsten Breitfeld's remarks are not true, the big screen raises safety concerns in the process of collision. It’s also highly incredulous that whether the first product can be actually delivered in 2019.
On September 28, FAW Xiali announced that it would transfer its 100% equity of FAW Huali to the parent company of Byton, Zhiteng Automobile, Nanjing Zhixing Electric Vehicle Co., Ltd. at a price of 1 yuan. This means that the new high-tech car brand Byton will also get the qualification for making cars. According to industry insiders, around May 2019, the company will be able to officially acquire the car production qualification.
However, completion of delivery does not mean that mass production can be achieved. FAW Huali was listed in the Ministry of Industry and Information Technology as a special public vehicle manufacturer (the third batch) in May this year. According to the requirements, the special announcement period for this batch is from May 4, 2018, to May 3, 2020. During this special time, the Ministry of Industry and Information Technology no longer accepts new product declarations from the enterprise. That is to say, if there are no special circumstances, the time for the large-scale delivery of the first product of the Byton will be no earlier than May 3, 2020.
Furthermore, in order to get the production qualification, Byton also carried a loan from FAW Huali worth USD 115.99 million and needs to pay the wages for FAW Huali employees totaling USD 7.9 million. They need to pay all together USD 123.24 million. For today's Byton, the fund is more a serious problem than qualification.
In terms of talents, in addition to the 24 high-end talents mentioned above, Byton also emphasized the strength of its research and development unit, bragging its research and development team of 500 people in Silicon Valley. Excellent talents ask for high recruiting and management cost. According to the incomplete estimation of the company, the enterprise's spending on human resource in a year can reach hundreds of millions of dollars.
At the same time, Byton had not yet raised more than 1 USD billion. In contrast, its high-end car industry aiming counterpart NIO has collected more than 4 USD billion fund for itself; Byton's another peer, XPENG Motors has also raised more than 2 USD billion. By the end of October 2018, Carsten Breitfeld had the idea of IPO (listing) fundraising, which reflected its financial problem.
However, Byton is being strongly supported by the powerful FAW group, which received promises of USD 147.19 billion from 16 Chinese banks in October. This indicates that even if the progress cannot go smoothly, Byton may be acquired by FAW group, but not necessarily go bankruptcy.
Ended up by being acquired is not the ideal future for Carsten Breitfeld. They are still busy doing fundraising everywhere. After the "road show events" in four European countries (Germany, Netherlands, Italy, Norway), Byton also took two concept cars: BYTON K-Byte Concept and BYTON M-Byte Concept to four cities in China. On November 30, they went to the Los Angeles Auto Show as well. Numerous efforts made by these two Auto experts showcase the difficulty of a traditional car industry originated company's struggle of building high-tech cars: The battle is not easier than the internet companies'.
Author: ZHANG Yuzhe; LI Jia translated and edited this article; Write to at LiJia@EqualOcean.com