SHANGHAI - China-based electric car startup Byton said on Tuesday it will suspend production from July 1 to conduct a reorganization of the firm after being hit by the coronavirus pandemic.
The company, which is backed by state-owned automaker FAW Group and battery supplier Contemporary Amperex Technology Co Ltd, said it was also actively raising funds to address issues relating to unpaid staff salaries and that it hoped to start paying employees from July.
"The new coronavirus epidemic has brought great challenges to Byton's financing and production operations," it said in a statement.
"After careful consideration and joint consultations with our shareholders and management, we have decided to, from July 1, kickstart a plan to lower employee costs and promote the company's strategic reorganization," it said.
Byton produces all of its vehicles at a plant in Nanjing. From Wednesday it will suspend most operations in China, where its activities include research and development.
The company is among a series of Chinese electric vehicle manufacturing startups that have emerged in recent years to challenge foreign companies like Tesla Inc. China, which has been eager to curb smog and spur its own auto industry, has said it wants so-called new energy vehicles (NEVs) to account for 25% of auto sales by 2025, up from around 5% currently.
But appetite to fund such startups began falling last year and has been dealt a further, heavy blow by the coronavirus pandemic, leaving a number fighting to survive.
In May, sales of NEVs fell for an 11th month to 82,000 units, China's largest auto industry association said. NEVs include battery-powered electric, plug-in petrol-electric hybrid and hydrogen fuel-cell vehicles.
In April, industry website Electrek reported that Byton had put hundreds of employees from its Santa Clara facility in California on furlough.
Byton was launched in September 2017 by Future Mobility Corp, a company co-founded by former BMW and Nissan Motor executives, and also has software and design facilities in the United States and Germany.
(Reporting by Yilei Sun and Brenda Goh; Editing by Susan Fenton) ((firstname.lastname@example.org; +86 (0) 21 2083 0088; Reuters Messaging: email@example.com))