Faraday Future's Chinese Sugar Daddy is Selling Land to Improve Its Crippling Financial Woes
Faraday Future is more of an automotive marketing company than it is an automaker. The company has been making unsubstantiated promises and ignoring its fiscal woes without giving much assurance that it will ever bring a production car — or assembly plant — into the real world. Problems have continued to mount and, like any deeply rooted zit, the situation is gradually coming to a head.
This month, Nevada State Treasurer Dan Schwartz demanded that the Governor’s Office of Economic Development conduct an audit of Faraday — throwing in Tesla for good measure. Schwartz has been critical of FF ever since it received government money to help build its factory, only to see work on the facility stalled due to nonpayment last fall. Faraday has since scaled back its construction plans, claiming that it was necessary to ensure production begins on schedule.
Now, FF’s primary backer, LeEco, is selling a 49-acre Silicon Valley property less than a year after purchasing it from Yahoo Inc. This comes after the company’s founder and CEO, Jia Yueting, explained to employees in November that LeEco was facing devastating financial issues stemming from its uncontrolled expansion.
According to Reuters, Chinese developer Genzon Group plans to purchase the site for $260 million — $10 million more than what LeEco paid in June. That money will likely go toward paying off debts owed to business partners and suppliers, as well as help settle some legal disputes. How much of that will go toward helping Faraday Future’s production goals is unknown, but the company could use every penny.
As for the audit, Schwartz has been told by the Governor’s Office of Economic Development’s executive director Steve Hill that he will comply with the audit request. “We have spoken with the Administrator of the Division of Internal Audits and have expressed our commitment to fully cooperate with any audit the Division determines appropriate,” Hill stated.
The audit should be completed by August 1, 2017. While it’s unclear why Tesla was also thrown into the mix, as it has a definitive business plan and is already bringing cars to market, Schwartz said that any company receiving millions in federal tax credits and financial assistance from the state should be thoroughly vetted. The investigation aims to add clarity to the process and get to the bottom of how a company like Faraday, which Schwartz has referred to as a ponzi scheme, was ever approved.
“The audit will look into job creation data, amount of money invested in the state by everyone involved with the projects, the process that GOED used to qualify the project, and the rationale for what related documentation is deemed ‘confidential.’ It is my hope that this audit provides greater transparency for these large scale projects,” he said.
[Image: Faraday Future]
SCE to AUX on Mar 17, 2017
"Schwartz said that any company receiving millions in federal tax credits and financial assistance from the state should be thoroughly vetted" Yes, they should. And why is the Nevada state government the last to figure this out? Actually, Nevada already had milestones and checks in place to safeguard its taxpayers against FF's potential shenanigans, so I'm not sure what the real issue is.
FreedMike on Mar 17, 2017
" This comes after the company’s founder and CEO, Jia Yueting, explained to employees in November that LeEco was facing devastating financial issues stemming from its uncontrolled expansion." History is replete with examples of "uncontrolled expansion" in one's nethers causing no end of devastating financial issues. I'm on the list.
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