China’s 65-year-old FAW ties up with start-up Byton to build electric cars

China’s oldest automaker, set up four years after the People’s Republic was founded in 1949, has tied up with one of its newest carmakers, in a sign of how traditional manufacturers are striving to stay relevant in an industry buffeted by the twin forces of electrification and autonomy.

FAW (short for First Automotive Works) has made an unspecified investment in electric vehicle start-up Byton, with the two companies cooperating in research and development, production, sales and services.

FAW’s investment is part of Byton’s B round of fundraising, according to the company’s co-founder and president Daniel Kirchert, speaking in Beijing on Friday. He declined to reveal further details, other than to say the process has been “very smooth”.

“FAW is the [eldest son] of China’s automobile industry and Byston is a car start-up driven by technology. Our cooperation has profound meaning,” said Liang Guiyou, head of the new energy development institute at FAW.

Byton, which is China-based but run by former executives of European car makers like BMW, has set a target valuation of US$1.2 billion, according to a February report by China Money Network.

Claiming to be first with a “smart intuitive vehicle”, Byton unveiled its concept SUV at the Consumer Electronics Show (CES) in Las Vegas in January. Featuring facial recognition access, assistive driving technologies and hand gesture controls – for a price 40 per cent less than a Tesla Model X – the SUV is scheduled for production and sales in China next year, followed by American and European markets in 2020.