16 AUGUST 20, 2018 “Most of them won’t happen. These guys are jumping in on the fl y, saying EVs are the next big thing. But a lot of them are going to get to a point where they say, ‘This is a lot more diffi cult than I thought.’ ” James O’Neill, managing director, JFP Holdings in Beijing Byton’s Feng Changge went from dealer to EV maker. CHINA 110 EV makers chase market’s soaring sales Byton’s factory in Nanjing, China, is under construction, above, but the startup plans to start selling its M-Byte in China late next year. The interior, left, boasts a 4-foot-wide monitor. continued from Page 1 10 inches high — navigated by gesture con- trol.
T e battery, off ered in two sizes, will deliver a driving range up to 329 miles . And, to boot, it will sticker for a modest $45,000. closer look at Byton. If that all sounds too good to be true, execu- tives hope to have their Nanjing factory ramped to peak production of 300,000 vehi- cles within fi ve years. Oh, and that output will span at least two nameplates — including an upcoming K-Byte sedan with Level 4 auton- omous driving ability. Feng found his EV inspiration only in 2014. As chairman of Harmony Group, one of Chi- na’s largest luxury-brand auto retailers, he had just begun collaborating with Tesla in af- tersales.
“Tesla,” he said, “made me realize the auto sector would experience a revolution.” Feng wanted to play a part and soon began assembling what are known in China as the “four haves”: capital, technology, product and factory. T ey are considered the keys to success. What makes CEO Carsten Breitfeld, a for- mer BMW Group vice president, think he has any chance in pulling it off ? In a word, China. “What we do here, to be honest, is nearly impos- sible,” Breitfeld said at the June opening of By- ton’s headquarters here. “T e only place in the world you can make it is China.” A scant four years later, he is nearly there. Capital In the beginning, Feng took the natural ap- proach for China.
He partnered with two of its biggest tech moguls: Tencent Chairman Ma Huateng and Terry Gou, chairman of Fox- conn, the electronics giant best known for as- sembling the Apple iPhone. Indeed, China has emerged as a global incu- bator for next-generation electrifi ed driving and a potent Silicon Valley rival. T e roster of up- starts is long and growing. Beyond Byton, there is Nio, Singulato Motors, Xiaopeng Mo- tors (commonly known as Xpeng) and Welt- meister (also known as WM Motor). Each is virtually unknown overseas; each aspires to be the next Tesla. JFP Holdings, in Beijing, told Automotive News . “T ese guys are jumping in on the fl y, saying EVs are the next big thing.
But a lot of them are going to get to a point where they say, ‘T is is a lot more diffi cult than I thought.’ ” ment advisory fi rm focused on China’s autonomous and EV markets. “With that gov- ernment backing, you have a willingness to stay in the game as long as it takes to succeed and thrive.” Breitfeld: “Nearly impossible” task T ey began recruiting talent and aimed high. In their sights was the BMW team that engi- neered the i series of electrifi ed vehicles, in- cluding the i3 and i8. T ey poached Breitfeld, a German mechanical engineer who was head of i8 development. Other BMW col- leagues soon followed. China plays by its own rules.
Beijing is fi xat- ed on EVs as a crucial next-generation tech- nology China must dominate. T e speed, zeal and ease with which China is attacking the future has traditional metal benders from Tokyo to Detroit to Wolfsburg looking over their shoulders. Its authoritarian government has an action plan called Made in China 2025 that spells out that ambition and calls for China to lead in autonomous driving and artifi cial intelli- gence. “The shift toward new-energy vehicles, as a result of the strengthening NEV poli- cies, has given China the momentum to overtake other countries,” Kazuhiro Ko- bayashi, Toyota’s head of China opera- tions, warned at this year’s Beijing auto show.
“What impresses me the most is the sense of speed.” Byton’s founder and co-chairman, Feng Changge, is a Chinese auto dealer who was inspired to start making cars for himself after a one-hour sit-down with Tesla CEO Elon Musk. But they joined with a caveat. T e foreign managers wanted unencumbered control, without the interference of big external inves- tors tied to Tencent and Foxconn. So Byton turned to traditional capital markets and more hands-off investors. By 2022, Beijing wants annual production of new-energy vehicles to reach 2 million units.
T e category includes plug-in hybrids and green alternatives such as fuel cell vehi- cles, but in practice, it means mostly bat- tery-powered full electrics. Feng is a poster child for the zeitgeist sweeping the nation. “Every startup story be- gins with a dream,” he said. “T is is an era of heroes. Big or small, we all have a dream to become a hero.” To understand how China does it, take a As of June, the haul from those funding sources, including a large state-owned auto- But survival, let alone hero status, is still a long shot for most of these startups. T e fi eld is crowded, and the technology is still in its infancy.
Moreover, the growing pains for Tes- la, which is still struggling with mass produc- tion and has yet to book an annual profi t, are sober warnings of the hurdles ahead. Such top-down policies make EVs must- haves for old-guard manufacturers, but they also entice new players such as Byton into the game. A California-style carbon trade pro- gram, for example, begins next year and adopts more stringent requirements in 2020. EVs get the most generous credits — the lon- ger their range, the more points they generate for their manufacturer.
China’s rules China further stokes EV sales with subsidies of up to 67,500 yuan ( $9,800 ) per vehicle and other gimmicks, such as special allowances for limited license-plate registrations in big cities. China already is the world’s biggest EV mar- ket. Sales soared 96 percent to 313,000 vehi- cles in the fi rst half of this year, according to the China Association of Automobile Manu- facturers. But some 110 EV makers are chas- ing that pie, and most, like Byton, have yet to sell a single vehicle. Many industry watchers warn the bubble is bound to burst. Local governments compete for factories and jobs by doling out sweetheart loans.
To keep costs down, Byton wants to get by with fewer prototypes, such as these M-Byte crossovers, by doing detailed teardowns of the ones it does build. “Investors think, ‘T e government wants this to happen, and that’s a green light for us to go in with these huge investments,’ ” said Michael Dunne, CEO of ZoZo Go, an invest- “Most of them won’t happen,” James O’Neill, managing director of advisory bank