TTAC News Round-up: Guess How Much Cash Faraday Future Owes the Firm Building Its Factory
If you were thinking a vehicle manufacturer backed by a billionaire with a futuristic hyper-car concept and hundreds of millions of dollars in government tax incentives wouldn’t have problems paying the bills, you would be wrong.
That, Hyundai executives are taking a “voluntary” cut in pay, German prosecutors could be letting Volkswagen’s top brass off the hook, and Honda markets a car you can only drive in California… after the break!
Billionaire backed EV manufacturer has millions in unpaid bills
Automotive News is reporting that AECOM, a construction firm working on Faraday Future’s billion dollar factory, has informed the electric-vehicle startup that it owes millions in unpaid bills.
Robert Gay, vice president and project executive at AECOM, issued Faraday a letter on October 10 that cites an unpaid deposit for September to the tune of $21 million. The letter also forecasts payments due of $25.3 million for October and $11.8 million in November.
Faraday Future, backed by Chinese billionaire Jia Yueting, began developing a 900-acre site in July after holding a much-publicized groundbreaking in April with Nevada state officials. While work on the actual factory isn’t expected to begin for several months, the company hopes to use it to build a range of fully electric vehicles for sale in the U.S. and Asia. To help, Nevada came up with a $215 million incentive package that was approved in December 2015.
But Nevada treasurer Dan Schwartz has already expressed concerns over his state providing hundreds of millions of dollars in incentives for Faraday Future to build a factory outside of Las Vegas. Schwartz’s fears stem from Jia’s heavy reliance on equity-backed loans and China’s volatile stock market.
“You can see where this leads,” Schwartz told Bloomberg back in July. “His Internet company is successful, but that doesn’t generate the billions of dollars he’d need. Where’s he going to get the money?’’
Currently, Faraday has only showcased a single EV in the form of a 1000 horsepower single-seat concept car that will never ever make it to production, but is based off of the modular design it plans to use for future vehicles. Those vehicles are claimed to have 15 percent higher specific energy than a Tesla Model S and, based on some teaser photos, will probably be crossovers. Faraday Future plans to let the public see the finished products at next year’s Consumer Electronics Show.
Hyundai Motor executives to take voluntary pay cut
A spokesman from Hyundai Motor Co told Reuters that a voluntary wage cut was being introduced for executives, but did not specify as to why. However, we can certainly hazard a guess.
Hyundai and Kia Motors have seen their share of the market begin to dwindle, especially in Asia and emerging markets like Russia and Brazil. The company also suffered a record number of strikes this year, including nation-wide walkouts. As a result, Hyundai has lost an estimated $2.5 billion in product.
The company’s second quarter net profit fell 2.6 percent on year, the 10th straight quarterly decline. After so much strife, the third quarter doesn’t look like it will play out much better for Hyundai.
Germany’s VW probe hasn’t yet implicated leading management
Volkswagen Group has been under close scrutiny this year. However, Bloomberg says, German prosecutors haven’t yet found anything tying VW’s top brass to the approval of the emissions-cheating program that started the fiasco.
Prosecutors are investigating 21 high-level executives and believe they possess a decent picture of how the scandal came to be. That doesn’t include any obvious connections between senior management and the decision to implement the plan to program turbocharged direct injection diesel engines to activate certain emissions controls only during laboratory emissions testing.
“If we had reasonable indications in the diesel probe suggesting that board members knew something about illegal action, we would put them on the suspect list, and we would also have communicated that to the public,” Klaus Ziehe, spokesman for the prosecution, said in an announcement. “You may understand from the fact that this didn’t happen that so far we don’t have these indications.”
Although investigations are ongoing in Germany and here in North America, Volkswagen has stuck to the narrative that only a small group of engineers were to blame for the misconduct. But that hasn’t kept the company’s former CEO from resigning or saved it from billions of dollars in fines and buyback costs.
Honda’s car of the future won’t allow you to leave California
Hydrogen may be the most abundant element in the universe but hydrogen fueling stations are right up there with hens’ teeth if you don’t live in California. And, according to the New York Daily News, if you want to own the 2017 Honda Clarity, Honda says you’ll have to live within ten miles of one of those elusive fueling stations. You’ll also need to cover that $60,000 MSRP.
This essentially limits you to San Francisco or Los Angeles.
Replacing the FCX Clarity, the new generation expands its range from 240 miles to an EPA-estimated 366 miles. The predicted range is good for alternatively fueled vehicles, as Toyota’s hydrogen-powered Mirai only yields a range of 312 miles and the current Tesla Model S can only make it 315 before needing a recharge. Although, the Tesla can drive 183 miles away from home without becoming completely useless.
Honda is selling the Clarity this winter in extremely limited numbers. It also plans on expanding the Clarity line with a Clarity Electric and Clarity Plug-In Hybrid in 2017 as part of its push to bring its total carbon dioxide emissions to half of its 2000 levels by 2050.
[Images: Faraday Future; Hyundai Motors; VW Group; Honda]
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I don't understand the value proposition of a hydrogen fuel cell powered car. It's basically an electric car that you can recharge very quickly, but only at a very limited number of locations. A lithium battery electric car takes a long time to recharge, but you can easily and cheaply recharge it in your garage overnight. Both give a California driver solo access to car pool lanes.