Faraday Future “Shifts Strategy”, Pulls Plug On Nevada Factory. Is The FF91 Dead?

4 weeks ago by Jay Cole 48

The Famous January 25th (2016) “Bobcat Tweet” from Faraday that started it all!

If one has been following the long and sordid tale of Faraday Future, and its grandiose North Las Vegas production facility dreams, it should come as no surprise that the start-up has officially scrapped plans for the facility on Monday.

Faraday Future CFO Stefan Krause said the decision to halt production was a business strategy, with the company making a statement (below) that it will now instead look for an existing facility to produce – uh, whatever it will produce.

“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 process of identifying a manufacturing facility that presents a faster path to start-of-production and aligns with future strategic options.”

Interestingly, this “new” future existing location is reported to still be in Nevada or California, and could require just $80 to $100 million to set up (if Faraday Future could find such funds) as opposed to the ~$1 billion plus for the original Nevada factory.

Faraday Future FF 91: 0-60 MPH In 2.39 Seconds

There was no word on the status, or new production timing for the FF91 electric supercar (which recently completed Pike’s Peak in record time in the now somewhat ironic “production car” class).

Although the company says they have the majority of the equipment necessary to build the EV, but that it now needs a place to store the equipment and set up the line (one assumes they will also need some working capital to pay for parts and start-up costs, as its unlikely any suppliers will be extending them credit).

Faraday today states that they “…are in the process of identifying a manufacturing facility that presents a faster path to start-of-production and aligns with future strategic options”, but it also doesn’t actually say the words “FF 91” in that statement either.

To us reading between the lines, it kinda sounds like the FF 91 won’t be happening anytime soon.  Or maybe ever.

The first clue there was trouble at the 900-acre site, located at the Apex Industrial Park in North Las Vegas, was when the company pulled a little PR stunt by having a dozen rented Bobcats (photo above) zip around the vacant property “clearing the way for our manufacturing facility in North Las Vegas”.

That was ~18 months ago.  A “ground-breaking” would follow in April of 2016.

Original Faraday Factory Rendering

Since then it has been a steady stream of lawsuits over unpaid bills and execs leaving the company (here, here, here, etc.), and the cancellation of a companion California facility, and also the “downsizing” of the now cancelled Nevada plant, from ~3 million sq feet to 650,000.

Over that time, the company has reportedly sought ~$1 billion in new funding as founder Jia Yueting’s finances have crumbled (just last week a Shanghai court froze more than $182 million of his assets), and after only reported netting 60 paid reservations initially for its FF91 electric car (out of 64,000 unpaid ones).  Mired in bad press, and with a rocky history, that money raise apparently didn’t go so well.

In a statement to Business Insider, a senior level Faraday employee said, “We are in a precarious situation right now. The generous funding we had in the past is no longer here.”

More Bobcat action!

Steve Hill, Director of the Governor’s Office of Economic Development made a statement on the matter (below), saying that Faraday has paid all the applicable taxes on the land, and that no state incentives had been yet paid to Faraday Future.

Faraday Future has informed the Governor’s Office of Economic Development (GOED) that it has put the construction of its factory in North Las Vegas on hold.
 
Throughout the process of working with Faraday, the state recognized both the opportunity a large manufacturing facility could provide as well as the inherent risk associated with a start-up company attempting this endeavor.  In order to completely protect the citizens of Nevada from risk, the agreement with Faraday requires the company to fully invest a minimum of $1 billion in order to receive any state incentives.  In accordance with this agreement, Faraday has paid all taxes owed to a Trust Fund established by the state.  The agreement with Faraday held Nevada’s citizens harmless from the risk associated with this project.

Meanwhile State Treasure Dan Schwartz, who has been screaming “wolf” since the very beginning on Faraday Future and its finances, took a bit of a victory lap with his statement:

“We all make mistakes, but this one was obvious. Long after it became apparent that ‘a mysterious Chinese billionaire’and Faraday Future could never build a $1 billion electric auto plant, Nevada state officials continued to insist that Faraday Future would magically create 4,500 jobs in North Las Vegas. Now, Jia Yuteng, Faraday’s funding source, has had his assets frozen by a Shanghai court and is under increasing scrutiny in China for what amounts to fraud; the automobile plant is just a pile of sand in the APEX Industrial Park; and, the promised jobs are yet another mirage in the Southern Nevada desert. 

“The only good news is that the Treasurer’s Office continued to press for financial information from Faraday and refused to issue the $175 million bond without detailed information.

“Welcome to Nevada, where good government takes a back seat to bad deals.”

Nevada Governor Brian Sandoval statement: 

“Throughout the process of working with Faraday Future, my office, GOED and the Legislature made it a priority to ensure that Nevada’s interests and taxpayer funds were entirely protected. The agreement between the State and the company required a trust fund to hold any earned abatements until the company achieved a $1 billion investment.

While I am disappointed in today’s announcement, I can say with certainty that Nevada’s citizens were held harmless financially. The State of Nevada continues to perform as one of the top economic states in the nation, drawing the interest of companies from across the county and the globe. Additionally, I know that APEX has the potential to become a world-class destination for advanced manufacturing and distribution centers and will be a catalyst in transforming Southern Nevada.” 

Faraday Future’s Jia Yeuting and Nick Sampson in front of the FF 91 at its live debut this past January

Wonder what had been done at the facility since Faraday took over, here is an itemized list prepared by Faraday and the Nevada Governor’s Office of Economic Development (we aren’t so sure about item #1)

1. Capital investment of $160,000,000
2. Completed all site demolition work.
3. Graded and moved over 2.5 million cubic yards of earth on site
4. Completed installation of the underground sewer
5. Completed grading (with the exception of the north and south channels not required for this phase)
6. Certified that the pad for the factory building is at grade and ready for the start of foundations
7. Established on-site offices for both Faraday Future employees and the general contractor
8. Leased additional interim office and meeting space in the city of North Las Vegas.

Faraday Future statement on the North Las Vegas facility:

“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 process of identifying a manufacturing facility that presents a faster path to start-of-production and aligns with future strategic options.
 
Accordingly, we have decided to put a hold on our factory at the APEX site in North Las Vegas. As the land owner, we remain committed to the buildout of the APEX site for long-term vehicle manufacturing and firmly believe North Las Vegas is an ideal place for us to be.
 
We would like to thank our partners in Nevada for their continued support throughout this process: Governor Sandoval and his office of Economic Development, Clark County and Mayor John Lee and the North Las Vegas officials.
 
More details on Faraday Future’s new strategy will be shared in the coming weeks.”

As noted by Faraday Future’s statement, they still own the property at the APEX site, but we think it is probably a reasonable assumption that the company is already looking for a potential buyer of the site to finance its now, much smaller, aspirations.

Business Insider

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49 responses to "Faraday Future “Shifts Strategy”, Pulls Plug On Nevada Factory. Is The FF91 Dead?"

  1. unlucky says:

    Yes.

    If that’s possible for something that never was alive.

    1. Pushmi-Pullyu says:

      Yes, exactly: The pertinent question isn’t “Is it dead?” but rather “Was it ever alive?”

      1. La Frennia di Mamata says:

        Their Presentation was Horrendous . Children could have done a Far Better job at their Presentation. I am not sure that “STRATEGY” ever played a part in anything Faraday has ever done to this point..For one thing. , their Money man appeared dis-orientated and totally “0blivious” to the goings on when he stepped on the stage.I was very embarrassed for Them just watching. These Shanannagans had Failure Written all over them right from the “Get Go”

      2. Kosh says:

        Crap! That is a HUGE loss of bobcat operator jobs!

  2. Mark.ca says:

    But there was a real bobcat action there…how is this possible…I’m shocked i tell you!

    1. Pushmi-Pullyu says:

      What was the comment posted here on InsideEVs in response to the original appearance of that photo? Something like “Bobcats in their natural habitat.”

      That is, hands down, one of the fall-on-the-floor-laughing, funniest impromptu lines I have read in my entire life! There ought to be an InsideEVs “Hall of Fame” where such comments are preserved for posterity.

      So, in that respect, Faraday Future has not been a complete waste of time. 😉

    2. Lawrence says:

      Skid steers made by CAT. They aren’t Bobcats.

  3. Mike I. says:

    FF should find some existing facility to do some low volume production in. Get some revenue flowing, then decide what the real production target is and build an appropriately sized factory at the Apex Ind. Park.
    In this regard, I have a lot more respect for Rivian Automotive.

    1. Mark.ca says:

      You forgot to say “do some stock selling” sometime in between the time ther things mentioned.

  4. Pushmi-Pullyu says:

    I understand that people in general don’t like it much when someone crows “I told you so!” and really rubs it in, but I’m going to indulge myself for just one post, so hopefully that’s not rubbing it in to an obnoxious extent.

    Looking back at the comments to the very first article on FF posted to InsideEVs, I see my responses include:

    “I don’t think this is a serious proposal. Sounds more like a way to bilk ‘investors’ out of money.”

    -and-

    “So… a Chinese entrepreneur wants to build a factory in the USA to build cars to be shipped back to Asia for sale?

    “How does that make economic sense? Why wouldn’t they use less expensive Asian suppliers for parts… then do assembly in China, as Apple does?”

    I got some very, very strong and persistent pushback from one of our Usual Suspects in that comment thread. I won’t embarrass him by giving his name here, but he flung the following at me:

    “You are clueless as usual.”

    Well, as they say: “He who laughs last, laughs best.” 😎

    1. DJ says:

      I don’t think I was any of those people but I just have to say it is pretty sad that you feel the need to spend time that way. Although if the internet is your main source of validation then I guess I can see why you would.

      1. Pushmi-Pullyu says:

        Troll bait.

        How sad he has nothing better to do… and is so blind to irony.

        1. Aaron says:

          You were right. When people started calling them “Faraway Future”, I sensed that others noticed this could be a sham too.

          I’m disappointed because of the good people who work for FF are likely going to lose their jobs. There are some good engineers that work there — some of whom I have 2nd-level connections with on Linked In.

    2. Mikael says:

      You were definitely right about them not succeeding.
      That was always the most likely outcome even though I was one of them who really wanted another EV company to succeed. Pushing the rest a bit harder.

      You were not right about it being a scam though. Unless you want to count Jia Yueting scamming himself out of money and being pushed out of his own companies for being reckless.
      He thought he was larger than life and you called his bluff very early. Cudos. 🙂

      1. Pushmi-Pullyu says:

        It’s often hard to tell the difference between a scam and a business run by someone who is completely clueless. Part of the reason why it’s hard to tell the difference is because people are fully capable of self-delusion; in effect, scamming themselves into believing something impossible.

        This is something I learned from long years of bitter experience of participation in TheEEStory forum (where I posted as “Lensman”), focusing on EEStor’s claims for a “super battery”; claims which ultimately proved false, and apparently a result of self-delusion by the principal of the company.

        But of late, I’ve taken to calling FF a “sham” rather than a scam. Either way, whether it was a deliberate high-tech investment scam or a startup run by a team who were amazingly clueless about how much it costs to mass produce cars, and how long it takes to go from start to production with an automotive startup… Either way, the ludicrous claims in FF’s press releases made it obvious (to those of us reasonably well-informed on the subject) that this company had absolutely zero chance of ever putting a real car into production.

        And I’m far from the only one who’s been saying so from the start, so it’s not like I deserve a prize.

  5. James says:

    Well, at least the sitework is done and Tesla can step in and build another Gigafactory there. Would be a nice way to spit in Jia’s eye

    1. William says:

      Not really the Tesla style, to kick an EV competitor when their down. Fraud a day is probably looking for a reason, to quit spilling money all over the desert, and watching it scatter to the four winds in the distant horizon.

      1. Pushmi-Pullyu says:

        FF isn’t a “competitor” for any real auto maker.

        It is, however, sad that shams like FF make it hard for startups that have a real shot at success to find funding.

        I’d love to see a lot more coverage of Rivian and other startups which show promise, and absolutely no more coverage of this sham company. FF has already gotten hundreds or even thousands of times more media attention than they deserve.

        1. CLIVE says:

          Absolutely

  6. ffbj says:

    I suppose this means that the future is fungible. (Also an FF).

  7. DJ says:

    I am surprised the FF 91 wasn’t on the list of North American COTY finalists… 😀

    1. DJ says:

      Just want to clarify for those foaming at the mouth Tesla fanboys this was a joke.

      1. ffbj says:

        Here is a little clue concerning jokes, they are supposed to be funny.

        1. Pushmi-Pullyu says:

          …and unlike posts from those who have an obsessive fear that somewhere, someone might actually be having positive thoughts about Tesla, that actually was funny! 😀

  8. Kevin Cowgill says:

    Sad to see those Bobcats scampering off into the blistering hot Nevada sunset.

    God speed little Bobcats.
    You will be missed.

    1. La Frennia di Mamata says:

      My friend in the Landscaping Business has 2 Bobcats..Yes, In the Flesh Real Ones…l m a o

  9. Damocles Axe says:

    I sincerely hope we never hear see any more articles about Faraday Future after this.

    Actually, now that Tesla is starting production of the Model 3 – I don’t plan on reading ANY articles about $100,000+ super-duper electric cars. They have no meaning to the world at large due to their small production numbers…

  10. Kdawg says:

    FF? FFS!

  11. Jake Brake says:

    So is it official that FF developed a car without a customer in mind or a business plan? Its like now that they have a car they are trying to figure it out how to sell it.

    1. Pushmi-Pullyu says:

      Well, FF had some pieces of a business plan. For example, they did make a deal with the State of Nevada for development of a factory, clearly trying to imitate Tesla’s successful deal for the Gigafactory 1 site. However, eve a brief glance at the “artist’s conception” of the ridiculous render posted above, calls into question whether there were ever any serious plans for a factory. That design looks a lot more like a discarded concept design from “Tron: Legacy” than an auto assembly factory!

      It seems an overstatement to say FF didn’t have a business plan. They did have something resembling a business plan, just not one that was even remotely realistic. What FF didn’t have, and still doesn’t, is a clue… or proper funding.

  12. wavelet says:

    Anyone of the FF employees received a salary lately? Genuinely curious… at 1400 employees, that alone would have been running at >$7M/month.

    They do get some points for using the term “strategic” for a company that’s not likely to exist in 6 months.

    So, anyone feel like inventing a meaning for “user-ship personal mobility”?

    1. Pushmi-Pullyu says:

      I wondered early on, and asked the question in comments to InsideEVs, whether any of those “employees” were actually being paid real salary, as opposed to just a consultant’s fee for allowing their name to be used.

      That’s something else I got ridiculed for, but I still think it’s a legitimate question, one I’d like to see answered.

      I suppose FF did have at least a small team of engineers and auto designers actively working for them. After all, FF’s two prototype cars didn’t build themselves.

      But the rest of those alleged 1400 employees… how many were actually hired, and did FF really pay them full salary to sit around doing nothing for something like two years?

  13. Euro point of view says:

    IMHO ,”sordid” is an excessive word , compared to the acceptable permanent lies we see in te EV bizness .

    1. floydboy says:

      Like what?

      1. Euro point of view says:

        like the carbon footprint of an EV battery .
        Tesla refuses to disclose it , and that for sure proves that the global carbon emissions benefits of EV has still to be demonstrated .

        1. Pushmi-Pullyu says:

          Burning just 1 gallon of gasoline emits 20 lbs. of CO2. Not a typo: 20 pounds!

          That means an average American gasmobile, at 25 MPG and ~14,000 miles per year, emits 5.6 tons of CO2 per year in its exhaust.

          Anyone who thinks the emissions (whether just CO2, or the real pollution involved) from making an EV’s battery pack, which is expected to last the lifetime of the car, could even possibly, even remotely be in the ballpark with the emissions from burning gasoline over the lifetime of a gasmobile… not to mention the substantial emissions from refining petroleum into gasoline…

          Well, anyone who actually thinks that is either amazingly clueless or seriously deluded.

  14. Chris O says:

    I wonder what State Treasure Dan Schwartz victory dance is all about if the Nevada taxpayer didn’t lose any money on this failed effort to create lots of new jobs. Doesn’t sound like case where “good government takes a back seat to bad deals” to me.

    1. Pushmi-Pullyu says:

      It’s too bad that the disagreement between the Nevada State Treasurer and the Nevada Governor’s office over the FF deal degenerated into a mud-slinging match with plenty of personal insults flying. Surely both had the best interests of Nevada and its taxpayers at heart, or at least I hope so.

      But even if ultimately Nevada taxpayers don’t wind up paying any direct money to FF for this folly, I can see where Dan Schwartz was coming from. At the very least, the State spent some money doing studies before they signed the deal with FF, and surely they at least paid some lawyers for writing up the contract.

      That’s taxypayer money that would have been better spent elsewhere. Governments at all levels (municipal, State, Federal) often waste an astounding amount of money on such studies, many or most of which are discarded and the rest appear to me to be insanely overpriced.

  15. Wynanad says:

    Schwartz was probably writing that comment to officials in the Nevada government and others who sought to be more cavalier in their trust and backing of FF. They were probably pushing to give more to FF and require less backing from the company to make them happy.

  16. Steven says:

    In all sincerity, I hoped they would pass the “Tucker Test” and get some cars on the road before folding up.

    I don’t hope any of the new breed of “BEV Only” manufacturers fail, but obviously some will succeed more than others.

  17. floydboy says:

    They’ve sailed out on the USER-SHIP!

  18. Vexar says:

    So… second look here at the photos. The Bobcats are not likely the right choice for a large grading project like a factory with 1 million + square feet. Wish I’d been more suspicious and critical when I saw the photo. Furthermore, they aren’t doing anything other than driving fast and kicking up dust. Sad news, all around. Not unexpected, but still sad. There had to be a few Nevada residents excited about the prospect of this being their next job.

    FF made one great prototype. Maybe some day there will be a movie about it, like the Tucker automobile.

    1. Pushmi-Pullyu says:

      I’m shocked, SHOCKED at the suggestion that FF hired a bunch of Bobcats and drivers to drive around aimlessly in an empty stretch of Nevada desert to promote the idea they were doing some real ground clearing!

      Why, surely you’re not suggesting that a company as honest, forthright, and scrupulously hewing to the absolute unvarnished truth as Faraday Future would ever resort to such deception, are you?

      (Warning: The above comment may contain traces of sarcasm. In fact, more than just traces.)

      Didn’t our current President say he once did much the same? Hired a bunch of bulldozers and/or construction cranes to look busy doing nothing at a site to encourage some potential investors to throw huge wodges of cash at him?

  19. leafowner says:

    “shocking” that this happened (pun intended)

  20. Mister G says:

    No news here…faraway future was DOA.

  21. Wayne Thomas says:

    Anyone reading history would know that it is economic suicide to invest a huge portion of the investment into the manufacturing facility without cash-flow and profits already sustainably coming in.

    Ask Excelsior-Henderson about how wise it was to invest millions into a new factory and hubristic “museum pieces” before a single motorcycle was even sold.

  22. kubel says:

    Anyone else having flashbacks to EEStor EESU? VAPORWARE.

    1. Pushmi-Pullyu says:

      To some extent, but even more flashbacks to EEStor every time I read a breathless, wide-eyed article about claims from some battery R&D startup company or research team.

      Yeah, I’m looking at you, QuantumScape!

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