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Byton founder says he quit because of Chinese government interference

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‘They are going to drive it to a stage where the whole Byton thing will be shut down’

Carsten Breitfeld, a founder and former CEO of EV startup Byton, says he left the company earlier this year because the Chinese government exerted too much influence after an investment from the country’s oldest state-owned automaker, First Auto Works (FAW). He said that while the deal with FAW lent the credibility he sought for Byton and increased access to suppliers, those benefits came with oversight and interference.

Breitfeld, who recently became the new CEO of struggling EV startup Faraday Future, made the comments during a media event held at Faraday Future’s Los Angeles headquarters on Thursday.

Breitfeld co-founded Byton in 2017 after a long career at BMW where he was in charge of the automaker’s BMW i program. Byton is headquartered in China and has offices in Munich and Silicon Valley. The company showed off a concept SUV at the 2018 Consumer Electronics Show where it also announced an ambitious plan to put the vehicle into production by the end of 2019.

To help make sure that happened, Byton announced last year that it was teaming up with FAW, and this year, it said the state-owned automaker was leading a big investment round that would get the startup’s electric SUV into production.

But Breitfeld said on Thursday that he “didn’t realize enough” what it meant to take investment from a state-owned automaker like FAW. He also says FAW took away his responsibilities.

“If the Chinese government enters your company, and takes, to some degree, influence or control, which they did at the end of the day, then things will change,” Breitfeld said. “They pushed the direction of Byton [to a place that was] not in line with what I thought we should do.”

FAW owns about 15 percent of Byton, Breitfeld claims, following the equity investment that was announced earlier this year. And he said the state-owned automaker has loaned hundreds of millions more to Byton since then, using the startup’s manufacturing facility in China and other assets as collateral.

“My feeling is they are going to drive it to a stage where the whole Byton thing will be shut down, they will just keep the plant and the platform,” he said, referring to Byton’s manufacturing facility in Nanjing, China, and the electric technology that powers the startup’s vehicle. Breitfeld also said FAW was approving all of Byton’s expenses and that many on the startup’s engineering team have left the company. “Everyone running the company now is PR and marketing,” he said. “The technical guys all left. By the way, in the future you might find them in another place not so far away from myself.”

“To be very clear though, I don’t want them to fail,” Breitfeld added. Breitfeld still has equity in the company, he said, and is still in “not very friendly” discussions with Byton and FAW over the status of that equity.

A spokesperson for Byton said in an email that “FAW is indeed a major investor, although their stake is smaller than Carsten states and they only hold one seat on the Byton board.”

“In addition, we have almost 500 employees here at Byton’s R&D center in Santa Clara, the vast majority of them being engineers, with hundreds of additional engineers at the Nanjing R&D center and production facility,” they added.

FAW did not immediately respond to a request for comment.

Breitfeld’s co-founder, Daniel Kirchert, has since taken over as CEO of Byton. Kirchert told The Verge earlier this month that Breitfeld’s departure was unexpected.

“That came as a surprise in April, when he left so suddenly,” he said. “I wish him best for the future and also his new endeavor.”

On the deal with FAW, Kirchert called it a “really good fit” and said the automaker “respect[s] our independence as a startup.”