FAW Group to invest in Chinese-funded EV startup Byton - Byton CEO

BEIJING (Reuters) - China’s state-owned automaker FAW Group [SASACJ.UL] agreed to invest a “significant amount of money” in Chinese-funded electric vehicle startup Byton, the startup’s co-founder and chief executive, Carsten Breitfeld, said on Friday.

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Byton would not disclose the scale of FAW’s investment, but Breitfeld, a former BMW executive, said FAW’s stake in Byton “will be so small that they don’t have any kind of control of us.” He spoke with Reuters ahead of the announcement.

Breitfeld said FAW will likely make use of Byton’s technology to develop its own brand called Hongqi or Red Flag more into a new-energy car brand.

The agreement for cooperation, signed in Beijing, had been negotiated for some time. But the announcement of it came in the wake of China’s decision earlier this week to scrap as early as this year foreign ownership restrictions on new-energy vehicle or electric vehicle companies in the country.

Some industry experts speculated the scrapping of those restrictions, which opens the door for companies such as Tesla Inc to produce cars on its own in China and sell them at more affordable price points, might weaken the business case for new electric-car startups such as Byton.

Breitfeld said Byton was not seeking for help from FAW. In fact, he said state-owned FAW is the one who sought out Byton.

“They’re not buying our company, and we definitely will stay independent,” Breitfeld said.

Byton is interested in gaining access to FAW’s supply chains for automotive components such as EV batteries, Breitfeld said.

FAW was not immediately available to respond to Reuters’ call for comment.

In February, U.S. autonomous driving startup Aurora added Byton to its growing list of clients for self-driving systems.

Reporting by Norihiko Shirouzu; Additional reporting by Brenda Goh; Editing by Gopakumar Warrier