18 AUGUST 20, 2018 CHINA continued from Page 17 Faraday Future’s cash crunch offers a cautionary tale. It still “If we had all the time in the world, we’d clean the building, have an opening party, and then move in the equipment,” Duchesne said. “We don’t have the luxury of that time.” wants to start delivery of the FF 91 in December. Te vision may sound risky to anyone fa- miliar with Tesla’s troubled ramp-up of its mass-market Model 3 sedan. Tesla repeated- ly has fallen short of its production goals and jury-rigged an auxiliary assembly line out- side, under a large tent, to boost output. Duchesne said Byton can avoid such pit- falls.
Its plan is to take advantage of China’s plentiful, affordable labor and resist the temptation to use robots in every corner of the factory. “We won’t be doing what Tesla is doing,” said Duchesne, who has set up seven facto- ries in five countries during his career. “Tey had a vision of machines building the ma- chine. We’ll be very conventional. We’ll use people where it makes sense.” If everything goes smoothly, Byton wants to make 5,000 vehicles next year, 65,000 in 2020 and 300,000 a mere three years after that. “Our schedule is aggressive, but I’ve worked on more aggressive schedules,” Duchesne said. “Preparation is everything.
Our strategy is to prepare and over-prepare.” Faraday Future initially planned to build the vehicle, purported to have a three-second 0-to-60-mph time and 300-mile range, at a $1 billion assembly plant near Las Vegas. “Some of these entrepreneurs really want to do something. Some of them just want to tell stories.” But those that survive still will be able to tap a vast pool of young, wealthy customers sali- vating for something fresh. EV optimists say capturing just a sliver of the biggest and fast- est-growing auto market on earth guarantees handsome returns.
Reality check In China, there is a derogatory term for slick startups that materialize overnight and daz- zle with lofty visions and charismatic leaders. Tey are called “PPT companies,” a play on the PowerPoint plans their leaders are fond of presenting but usually fail to deliver. It was forced to scrap that plan amid a crip- pling cash crunch. Facing angry creditors back home, Jia reportedly defied orders by Chinese regulators this year to return and sort out the mounting debts. Leon Li, 39, is among the cult of true believ- ers wholly sold on China’s EV vision.
Yale Zhang, managing director, Automotive Foresight Te management consultant from Beijing is among the 1,000 EV acolytes who plunked down a $260 deposit to preorder the Byton M-Byte due next year. Li wants to trade his 10-year-old Mazda6 sedan for a high-tech wonder with all the flair of a Tesla but a more attainable price. Breitfeld insists Byton is different. But there are no shortcuts to tedious prod- uct validation and regulatory approval. Fara- day Future is one cautionary tale. Instead, he camped out stateside, in a kind of self-imposed exile, to feverishly raise more money. He eventually did.
But the chastened Faraday Future downsized its ambitions and opted to build the FF 91 at a refurbished for- mer Pirelli tire factory in central California. stories,” said Yale Zhang, managing director of Automotive Foresight, a consultancy in Shanghai. “Even if the company fails, the founder can still come away with a lot of money.” Its parent company, LeEco, was a vid- eo-streaming website in Beijing that eventu- ally expanded into filmmaking, TV manufac- turing, mobile phones, broadcast sports pro- grams and even ride-hailing. But founder Jia Yueting bet all that on breaking into EVs. On July 30, Faraday Future said it had com- pleted its first body-in-white for the FF 91.
Zhang is among those expecting an indus- try shakeout. He likes Byton for its sweeping dashboard video display, which he called “absolutely dazzling.” Even that modest achievement is miles ahead of most aspiring competitors from China. Analysts caution that it is too early to say which startups are making it and which are faking it. Te ranks of EV players could thin as early as 2020, he said, when Beijing starts pulling the plug on its generous EV subsidies. At the same time, the threat of U.S. tariffs looms over hopefuls such as Byton that are counting on exports to buttress the business.
“I’m looking for something with a soul,” Li said at the glitzy unveiling of the K-Byte sedan concept in Shanghai, “and Byton definitely has soul. I think Byton is redefining the car.” a Te struggling EV contender still wants to start delivery of its FF 91 luxury electric cross- over in December. But it has been a bumpy, circuitous road. “Some of these entrepreneurs really want to do something. Some of them just want to tell Yang Jian contributed to this report. Software provider sues Case auto group AU TOMOT I V E A DV ER T ISING IN-HOUSE SERVICES Eric Freedman autonews@crain.com Filing:
Stores copied programs, didn’t pay fees counted amount, $21,400, but has refused to sign the new agreement or pay the $16,000 balance, the suit contends. Te dealership group stopped making monthly license payments in February 2017 and has not complied with Integrated Vehi- cle Solutions Group’s demand to re- move the programs from its CDK dealership management system platform, it claims. Creative Solutions and Production Support for Dealership In-House Marketing Departments A major provider of dealership man- agement software programs and ser- vices is suing Rick Case Automotive Group, of Sunrise, Fla., for allegedly breaching its licensing agreement and misappropriating trade secrets.
year and a half. MSAadvertising.com • 305-495-6600 “Tese important and very profit- able programs, clearly licensed un- der a written license agreement, have been appropriated,” said the software provider’s lawyer, Ian Ku- koff, of Miami.
“Te Rick Case deal- erships have refused to pay licensing fees and locked my clients out of their own programs.” “The Rick Case dealerships have refused to pay licensing fees and locked my clients out of their own programs.” Integrated Vehicle Solutions Group, which provides software and support services to dealerships, also accuses the dealership group, a number of its dealerships in Florida, Ohio and Georgia, and co-owner Rita Case of unjust enrichment and wrongfully re- fusing to return about 150 proprietary software programs after failing to pay monthly licensing fees for the past Ian Kukoff, attorney “We believe those damages are in the millions of dollars,” Kukoff said. jor competitor.
According to the suit, filed June 11 in Broward County, Fla., Circuit Court, the Rick Case dealerships were licensed to use Integrated Vehi- cle Solutions Group programs for sales, service, accounting, parts and payroll management. From late 2010 until 2016, the dealership group and its stores accessed more than 1,395 individual modules “without inci- dent, complaint or challenge” to In- tegrated Vehicle Solutions Group’s ownership of the programs, the suit said.
‘Removed and purged’ According to the suit, Rita Case claimed that the group had paid a software engineer to “redevelop identical programs with the same functionality of the IVSG programs.” However, defense lawyer Aaron Horowitz, of Fort Lauderdale, Fla., said, “My clients deny the allegations of IVSG’s complaint, and we will be defending the case vigorously.” Te Rick Case defendants have not yet filed their answer to the complaint.
But Integrated Vehicle Solutions Group spokesman Greg Euston said, “Tere is no evidence to support that claim and, regardless, that sort of du- plication would also be a breach of the licensing agreement.” (877) 403-6231 www.ABNetwork.com (877) 403-6231 www.ABNetwork.com Unpaid balance Rick Case Automotive Group has 17 dealerships and ranks No. 39 on Automotive News ’ list of the top 150 dealership groups based in the U.S., with retail sales of 21,913 new vehi- cles in 2017.
DIGITAL SIGNAGE ALIGN | ENGAGE | CONVERT Te suit seeks compensatory and punitive damages, as well a court or- der requiring Integrated Vehicle Solutions Group’s programs to be “removed and purged.” In 2016, Integrated Vehicle Solu- tions Group upgraded the platform at the dealership group’s request at a charge of $37,400, with a $16,000 dis- count conditioned on a new two- year minimum license agreement. Integrated Vehicle Solutions Group partners with CDK Global, one of the two primary providers of dealership management systems in the U.S. Reynolds and Reynolds Co.
is its ma- Kukoff said, “One of the things so puzzling to us is the actions taken by the Rick Case dealerships are inde- fensible — there doesn’t seem to a rational basis for them.” a Te dealership group paid the dis-