Byton, the Chinese electric vehicle (EV) start-up that has plotted a US entry for years, is suspending all domestic operations and furloughing staff after the coronavirus pandemic made it tougher to get its business off the ground. The suspension starts on July 1 and is set to last six months, closely held Byton told employees in an email seen by Bloomberg News. The company invited employees to resign in writing by June 30 and said it is making efforts to obtain funding to pay salaries owed to workers. Those who resign would have priority in being paid. Byton is one of the highest-profile Chinese EV start-ups to see its troubles exacerbated by the pandemic, which has hit demand for cars and other consumer goods. Even before the coronavirus broke out, Byton struggled to meet announced deadlines to start producing and delivering its first model. Byton furloughs staff, cuts pay as pandemic casts doubt on first car delivery Home to the world’s biggest EV market, China encouraged companies to get into the business with subsidies and other support, spurring fears of a bubble. New carmakers have come under pressure since the government started scaling back that aid last year and as Tesla’s locally built sedans grabbed more market share. In the letter to staff, Byton cited great challenges in financing and production caused by the coronavirus outbreak and other factors. Reducing staff costs are part of a strategic restructuring, during which Byton will retain some workers to maintain its basic operation, a company representative told Bloomberg. Founded by former BMW managers, Byton has about 1,000 employees in China and about 500 in other countries, including the US. Its investors include state-owned FAW Group Corp and battery giant Contemporary Amperex Technology Co Ltd , which has a deal to supply batteries to Tesla . China car sales rose for first time in almost a year in May, industry body says Initially named Future Mobility Corp, Byton was set up in 2016 with backing from investors such as Tencent Holdings and Foxconn Technology Group, formally known as Hon Hai Precision Industry. Those two companies later dropped out, with Tencent becoming a major investor in rival NIO and Foxconn backing Xpeng Motors. Byton co-founder Carsten Breitfeld, a former manager at BMW, left in 2019 to join another start-up before moving again to Faraday Future. Byton was planning to enter North America and Europe around mid-2020, Daniel Kirchert, a co-founder who is now chief executive, said early last year. The company would consider an initial public offering after new financing and production begins, Kirchert said at the time. Following years of rapid growth, China’s EV market has been slumping since mid-2019 on reduced government incentives and overall economic slowdown. Total sales of new-energy vehicles, including electric cars, fell 26 per cent last month to 70,200 units, following a drop of 30 per cent in April and 49 per cent in March, according to the China Passenger Car Association. The government still considers electric cars a priority growth area and has added a slew of fresh stimulus measures to help the industry recover. While dozens of upstarts are still struggling, those gaining users include Tesla and NIO, which obtained fresh funding this year from a local municipality to help it avoid a cash crunch .