Being an electric car startup in China with plans to expand to America has become tumultuous lately due to the ongoing U.S.-China trade war. Ever-increasing tariffs on automobiles have made exports costly. However, it looks like Byton just may have found a way around this. The startup’s parent company, Future Mobility, has just signed a deal to produce the Byton M-Byte in South Korea.
Manufacturing Byton Cars in South Korea
According to a report shared by Reuters on Wednesday, South Korea’s Myongshin (an auto parts supplier) just agreed to produce more than 50,000 electric vehicles a year for Future Mobility. The deal apparently involves sales, production, and investment, and the company should start manufacturing vehicles for Byton beginning in 2021.
Myongsin purchased a former General Motors plant in Gunsan, South Korea, back in June for $94 million. The U.S. auto manufacturer closed one of its four plants in the country last year.
While Myongshin did not confirm that the vehicles produced in the Gunsan factory would be for the U.S. market, its vice president, Park Ho-seok, did say that they would be sold locally in Korea as well as overseas.
Thanks to the continually escalating U.S.-China trade war, vehicles currently manufactured in China are subject to tariffs that make it increasingly difficult for companies to turn a decent profit after exporting them.
The good thing about South Korea, however, is the fact that it currently has a free trade deal with the U.S. as well as Europe. South Korea also has access to a substantial electric car supply chain, which means that production costs could be reduced. By manufacturing Byton’s cars in South Korea, Myongshin should be able to then export them to the U.S. and avoid tariffs altogether. The Byton M-Byte is expected to start at $45,000.
Will this move also help Byton avoid some of the influence of the Chinese government? Byton’s former CEO, Carsten Breitfeld, recently left the company to lead Faraday Future after he felt that the government was pushing the company in a direction that he did not agree with.
“I like China and appreciate the way China’s government is driving this industry,” he said in a statement to E for Electric’s own Alex Guberman. “FAW [First Auto Works, Byton’s state-owned investor] added a lot of value to Byton and I want Byton to succeed. If a state-owned entity comes in as an investor then the direction of a company might change. I eventually could not agree with this new direction.”
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