SHANGHAI — Chinese electric-vehicle maker Byton is in talks to go public through a merger with a special-purpose acquisition company, people familiar with the matter told Reuters.

Byton, whose key shareholders include China’s state-owned automaker FAW Group and EV battery maker CATL, is in talks with potential SPAC companies and investors about the listing and plans to go public as early as this year, two sources, who declined to be named as the talks were private, said.

Byton, which is backed by Apple assembler Foxconn, was launched in 2017 by Future Mobility, a company co-founded by former BMW and Nissan executives. But it has been facing cash flow problems since 2019 as investors were cautious ploughing money in a crowded sector when EV sales growth was slowing in the world’s biggest car market.

The embattled company was building a car factory in the eastern city of Nanjing but suspended the endeavor in July to conduct a reorganization of the company.

Last month Byton sealed a deal to start making electric SUVs with Foxconn and the Nanjing Economic and Technological Development Zone in 2022. Its first model will be the M-Byte utility vehicle.

As part of the agreement, Foxconn will invest $200 million into the utility vehicle research and production project and will help build supply chain for the EV production that aims to lower car manufacturing costs, one of the sources said.

Byton declined to comment.

“The company is currently focusing on the optimization of the supply chain manufacturing of Byton’s new energy vehicles, and will not comment on other market rumors,” Foxconn said in a statement.

Byton is closing its design and development center in Ismaning near Munich, Germany, Automobilwoche, a German language sister publication of Automotive News Europe, has reported.

The company has also suffered a recent exodus of top managers such as Byton CEO Daniel Kirchert and marketing boss Henrik Wenders. Top managers, including design chief Benoit Jacob and chief customer officer Andreas Schaaf, have also departed, Automobilwoche said.

A SPAC is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years.

SPACs have emerged as a quick route to the stock market for companies, particularly auto technology startups, and have proven popular with investors seeking similar benefits to that of Tesla’s high stock valuation.

EV industry companies Microvast, Faraday Future and EVgo Services are some of the companies that have agreed to merge with SPACs so far this year.