Faraday Future, the troubled California startup that aimed to unseat Tesla as king of electric cars, is scrapping plans to build a $1 billion, 1-million-square-foot factory in Nevada — a casualty of the sprawling cash problems of its billionaire Chinese financier.
It was just five months ago that FF was claiming that it was finally restarting construction of its proposed factory in North Las Vegas, almost 11 months after construction was first halted amid the company’s ongoing financial woes. Now it looks like that factory will never be built, as FF is reportedly looking into pursuing less ambitious (re: cheaper) options.
The news, first reported by The Nevada Independent, broke less than a week after it was reported that a Chinese court froze $182 million in assets of Jia Yueting, founder of tech conglomerate LeEco and a major investor in FF. At the time, FF claimed that Jia’s money woes wouldn’t affect production of the FF91, the startup’s first production model slated for a 2018 release.
“We have decided to put a hold on our factory at the Apex site in North Las Vegas. We remain committed to the Apex site in Las Vegas for long-term vehicle manufacturing,” Stefan Krause, who’s been Faraday Future’s chief financial officer for the past four months, said in a statement to the Independent. “We at Faraday Future are significantly shifting our business strategy to position the company as the leader in user-ship personal mobility — a vehicle usage model that reimagines the way users access mobility. As a result of this shift in direction, we are in the final stages of confirming a new manufacturing facility that presents a faster path to start-of-production and aligns with future strategic options.”
But other sources paint a darker picture of the company’s future. Senior-level sources told Business Insider that FF is in a “precarious situation,” and that operations in its Los Angeles-based headquarters were also being scaled back. One former FF executive also told The Verge that the company is in danger of missing its payroll, which could lead to a mass exodus of employees. “There are a lot of talented people basically doing nothing right now,” the source said.
What’s clear is that while Faraday Future has managed to stay out of the headlines these past few months, the company clearly has yet to recover from the setbacks it suffered leading up to and immediately proceeding CES in January 2017. Mounting debts, unpaid bills, supplier lawsuits, and financial mismanagement have all served to chip away at Faraday Future’s foundation. The FF91’s embarrassing onstage malfunction made it the laughing stock of this year’s CES. The company lost several top executives, including its “global CEO” associated with LeEco (currently undergoing its own financial crisis).
Meanwhile, the company has tried to put on a smiling face, recently completing the Pikes Peak uphill race in record time. But sources tell The Verge that these projects — in addition to Jia’s two other car projects — are distracting from the overall goal of manufacturing and delivering a stellar electric car.
“They’ve burned through cash on unimportant things (Formula E racers, polished videos, fake race cars),” the ex-executive said. “Then LeEco trying to fund three separate car initiatives simultaneously… They did set a new record for the Pike’s Peak climb which I feel exemplifies the brilliance of those engineers they’ve brought on… it’s just a shame that it seems it may all go to waste.”