Following earlier reports of money woes, mysterious Californian automotive firm Faraday Future has put the brakes on its much touted US$1-billion manufacturing facility, which was destined for a future on the outskirts of Las Vegas, Nevada. This comes after Bloomberg uncovered an email from the CEO Jia Yueting of LeEco (the parent company funding Faraday Future), saying their strategy had been unfeasible.
Jia went on to remark, “We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital & resources were in fact limited.” To ease the burden on the company, Jia then slashed his salary to a paltry one yuan (about $0.19) and began execution of cost-cutting measures.
On October 10th, the construction company responsible for US$500mil of the work on the manufacturing facility sent a letter to Faraday Future, demanding immediate payment to cover the costs of materials and subcontractors. In addition to this, the letter detailed projected payments due, with US$25.3mil required that month, and US$11.8mil for November.
The letter read, “AECOM management views these deposits as a critical metric to project financial security and maintaining confidence and credibility with our project subcontractors and suppliers.” A statement issued later by Faraday Future & AECOM jointly reassured all parties, saying “the business relationship between Faraday Future and AECOM is strong, and we remain committed to building our factory of the future in North Las Vegas.” To reiterate, a Faraday spokesperson said that, at the time, no work stoppage would take place. Hm.
Faraday Future hoped to use the factory in Nevada to build a range of electric vehicles, to be marketed in the US and in China. The state of Nevada incentivised the site by offering a $215mil package in December 2015.
Moving forward, Faraday Future says that its primary focus now is to ensure a successful unveiling of tis first production-ready model in January. The large crossover EV, which seems to target the Model X unabashedly, has already been teased numerous times. The firm has confirmed to portal Jalopnik that they are “temporarily adjusting their construction schedule,” and hopes to resume work on site in 2017.
