Byton bullish about 2019 electric SUV production

LOS ANGELES — In many ways, the story of Byton sounds like so many fledgling automotive companies backed by Chinese investors. The company has outlined grand plans to reinvent traditional business models. It has pinned its fortunes on an electric powertrain. Its interior experience revolves around a massive screen.

While competitors such as Faraday Future struggle to reach production, Carsten Breitfeld, CEO and co-founder of Byton, said that the plans it outlined following its 2016 founding and splashy debut at CES in January remain firmly on course.

"There are other startups saying they will do a new car every year and they'll sell 2 million cars a year and so on," he said last week at the Los Angeles Auto Show. "At some point in time, some investors came back to us and said that others had a much better story and that ours is not very sexy. But today, looking back, there's a big difference. Our story is still the same."

An assembly plant in Nanjing, China, is nearly complete. Production is expected to begin in April on the M-Byte, a full-electric SUV. Deliveries will start in the Chinese market in the second half of next year. European and U.S. launches of the M-Byte are tentatively scheduled for the second half of 2020. A second vehicle, the K-Byte sedan, is slated for production in late 2020.

"Our basic principles have been, be credible, be down to earth, be realistic," said Breitfeld, a former BMW Group vice president and head of that company's i8 vehicle development program. "You have to show the world you can deliver, because if not, you lose support from investors and partners and cannot build up a credible brand."

Thirty prototypes of the M-Byte are on the road in China, and that number is expected to reach 100 by the end of the year. Some portion of those vehicles will be shipped to the United States, where Byton's partner on autonomous technology, Aurora Innovation, will outfit the vehicles with self-driving systems for testing.

It's too early to say when that Level 4 automated system — one in which no human supervision or intervention is required — will be ready. But when the M-Byte launches next year, customers will have the option to purchase a Level 3 autonomous system, one that's capable of claiming control at least some of the time, with the possibility a human will be asked to retake control. Pricing on that system has not been finalized, but it will be an optional feature.

While selling vehicles to customers is Byton's initial business plan, Breitfeld says that's essentially a short-term plan until its vehicles can launch on shared networks that allow customers to carry a personal profile with them from car to car, whether it's one that's personally owned, part of a ride-hailing network or one that's rented at an airport.

Cars will use facial-recognition software to identify riders, and let them keep a profile in the cloud with their preferences.

"Our business model is not built on selling cars," he said. "We'll start with that at the beginning, but that's not a sexy business model. Margins are down and maybe going lower. … The real business is in using the car as a platform, and using the car to create a sales channel to sell digital content."

If there's a headwind on the horizon for Byton, it's perhaps one that's out of the company's control. The ongoing trade tensions between the United States and China could alter the company's plans to launch in the U.S. in 2020, though Breitfeld remains steadfast in his commitment to cracking the market.

Contingencies may include setting up assembly operations in South Korea, which maintains free trade with the U.S., or perhaps opening a final-assembly facility in the United States, he says.

"But that's still two years away, and we don't know what's going to happen," he said. "I still believe these guys will come up with some reasonable agreement, because this sort of trade friction not only harms China, but the U.S. as well. … It'd be in the common sense of everyone to find a good solution."