By on November 16, 2016

faraday future groundbreak

Faraday Future has stopped construction on its billion-dollar electric vehicle factory in North Las Vegas. This is another blow against a company with intentionally foggy structuring, mysterious revenue sourcing, and an financially overburdened parent company.

The electric vehicle startup had previously missed numerous payment deadlines with building contractor AECOM, but now work has stopped entirely. A spokesperson from Faraday Future told Reuters that the company is working with contractors during an adjustment period and expects work to continue on the factory in 2017.

Nevada State Treasurer Dan Schwartz, and probably anyone else who has been following this story, is a little less optimistic.

“This is a Ponzi scheme,” he said in an interview with Forbes. “You have a new company that has never built a car, building a new plant in the middle of the desert, financed by a mysterious Chinese billionaire. At some point, as with Bernie Madoff, the game ends.”

The state of Nevada had agreed to provide more than $200 million in incentives, as the EV factory was expected to create 4,500 local jobs.

Faraday is part of a network of young EV companies in China and the United States backed by Chinese tech entrepreneur Jia Yueting. Last week, Jia announced that his tech company, LeEco, was running out of money due to having expanded much too rapidly to be sustainable.

Despite claims that LeEco’s businesses are entirely separate from that of Faraday Future, the two companies are very much intertwined. No matter how unofficial or secretive, that relationship likely had everything to do Faraday’s Tuesday announcement that it will be “refocusing its resources” before construction on the plant continues.

Incredibly, Faraday Future says it remains highly committed to having a production vehicle ready for January’s Consumer Electronics Show.

The event will take place in Las Vegas, not far from the unbuilt billion-dollar factory.

[Image: Faraday Future]

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14 Comments on “Murky Automotive Startup Faraday Future Just Became an Automotive Shutdown...”

  • avatar

    “Incredibly, Faraday Future says it remains highly committed to having a production vehicle ready for January’s Consumer Electronics Show.”

    porcine aviation is more likely than that.

  • avatar

    Actually, the Faraday Future electric car plant is located in NORTH Las Vegas. It’s a different animal from the city of Las Vegas, as an NLV resident will tell you. It’s being built in what’s called the Apex Industrial Park. The state incentives include money for infrastructure (roads and utilities). Nevada’s governor, Brian Sandoval, has said the incentives have safeguards to protect the state in case the plant isn’t built. Stay tuned.

  • avatar

    ‘FaraWay Future’?

  • avatar

    Everyone knows, the most important thing when starting a new EV company is a big fancy new building. Everything else will just fall right into place after that.

  • avatar

    Dale 2.0

  • avatar

    While their company offices have a strict no-smoking policy;

    Apparently they’re Vape Aware.

  • avatar

    Precisely NO ONE saw this coming… How much of that $200 million in tax dollars have they gotten already?

    Also, isn’t Volvo tied up with Le Ecco? They probably aren’t to thrilled with this. I suppose it was the Chinese connection that brought the two companies together? I can’t imagine a recovering company like Volvo really would want to jump head first in with a mystery company like Faraday to produce their important electric vehicles.

    • 0 avatar

      I believe that’s Aston Martin.

      • 0 avatar

        Thanks for the correction. That makes even less sense than Volvo though… I would think Mercedes would be a better option, unless MB was asking for too much to share their tech and Le Ecco have them a screaming deal. But then you get what you pay for, right?

    • 0 avatar
      SCE to AUX

      From the article: “The state of Nevada had agreed to provide more than $200 million in incentives”

      From SlowMyke: “How much of that $200 million in tax dollars have they gotten already?”

      It’s not a handout, it was to be tax breaks. And a dubious Nevada carefully structured them to not turn on unless certain milestones were met.

      The biggest risk is to the contractors who are currently on the hook for something like $54 million in bills not paid by Faraday Future. Hopefully FF pays them, and walks away. I’d hate to see the NV taxpayers absorb it.

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