New Lease on Life, or Delaying the End? Faraday Future's Dad Drops Off Some Cash

Matt Posky
by Matt Posky
new lease on life or delaying the end faraday futures dad drops off some cash

After a myriad of financial troubles and irresponsible corporate dealings, we assumed Faraday Future’s end was near. However, its spectral parent company now claims it has convinced more than ten Chinese companies to invest $600 million into its automotive division.

While the future of Faraday can not be considered even close to bright, the brand could theoretically hobble onward using this financial stimulus as a crutch.

Reuters reports that Leshi Holdings has secured commitments of $600 million to support LeEco, the Chinese technology and automotive unit pulling Faraday’s strings. Half of that hefty sum is to be delivered immediately and invested directly into the auto business and LeEco Global.

Earlier this month, company founder and CEO Jia Yueting announced that LeEco was confronted with a major cash shortage stemming from its rapid and irresponsible expansion into other industries. Jia said it was necessary to take drastic cost-cutting measures and scale back LeEco’s automotive ambitions or risk being forced to abandon them entirely.

This incredible mass of capital and support could not have come at a better time. Zhou Jianping, chairman of Hailan Group, claims his company’s investment in LeEco is primarily to bolster China’s indigenous automotive industry.

However, LeEco and Faraday Future have only managed to deliver promises thus far. While Faraday assures us it will have a production-ready electric vehicle at the CES technology show this January, its last offering was a ludicrous supercar EV concept. Similarly, LeEco has been showcasing the LeSee — an autonomous vehicle with no clear idea of how it might work or be sold. Jia even went to far as to suggest that LeEco cars might eventually be free, using a business model that makes money on the content and other services sold through its autonomous connected cars.

What was not established, however, is how that business model might work. It’s also unclear how much of this $600 million will go toward finishing the construction of Faraday Future’s billion-dollar factory in Nevada. Work on the plant had been stalled due to the company owing millions in back pay to the contractor.

Richard Windsor, an independent technology analyst, told Reuters that he fully expects the financial pressures to eventually force LeEco out of the automotive industry. “I suspect that the automotive ambitions will be reluctantly curtailed which I think gives LeEco its best chance of success in its other endeavors,” he said.

[Image: LeEco]

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2 of 6 comments
  • Erikstrawn Erikstrawn on Dec 01, 2016

    I keep thinking they need to partner with Renault and build the "LeEcoCar".

  • Redmondjp Redmondjp on Dec 01, 2016

    Maybe they can repurpose the Faraday factory site as an off-road vehicle course or something like that.

  • Redapple2 C2 is the best. C3 next. Then C7 (looking at you jimII).
  • Jeff S Vulpine--True the CAFE rules are for ICE.
  • Gray I grew up in the era of Panther and Fox platforms. If only they developed a good looking two door Conti. The four doors became a cult in their own right. And kept the 351W as a top line option.
  • Vulpine ABSOLUTELY YES!!! Bring back the TRUE compact trucks. The demand for them is far higher than the OEMs want to admit.
  • Brn More likely, with Google having troubles, the money tree isn't as ripe as it once was and cutbacks are needed.I hope the overall industry continues to evolve. When I get the the point I can't easily drive, I would still appreciate the independence that autonomous vehicles can bring.